Buy IIFL Finance; target of Rs 800: Motilal Oswal

Motilal Oswal's research report on IIFL Finance

Mastering the asset-light model for sustained profitability Off-book strategy: Helping build granular and scalable retail businesses IIFL Finance (IIFL) is a diversified NBFC with a strong presence in various retail business segments. Its core products include gold loans, home loans, microfinance, LAP and unsecured business loans. IIFL’s consolidated AUM stood at ~INR731b as on Sep’23 and it delivered an AUM CAGR of 22% over FY21-1HFY24. IIFL is present in ~26 states/UTs and has a distribution network of ~4,600 branches. The company has an asset-light business model with co-lending and assignments contributing ~15% and ~25% to the AUM mix, respectively.

Outlook

IIFL trades at 1.9x/1.5x FY25E/FY26E P/BV. We initiate coverage on the stock with a BUY rating and a TP of INR800 (based on SOTP valuation).