Buy IIFL Wealth Management: target of Rs 2217: ICICI Securities

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26 Aug, 2025 12:21

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Despite non-conducive capital market sentiment, IIFL Wealth & Asset Management (IIFLW) registered 35% YoY growth in PAT in Q1FY23 to Rs1.6bn (down 4.7% QoQ), ahead of our expectations of Rs1.53bn. Delivery of >21% RoE demonstrates the benefit flowing from its annual recurring revenue (ARR) assets build-up strategy. ARR asset revenue was marginally positive QoQ, though up 33% YoY to Rs2.56bn (now constituting 69% of overall revenue) as retention on ARR assets sustained at 74bps. However, revenues fell 18% QoQ to Rs3.7bn primarily due to decline in transactional revenue (down 30% QoQ) and other income (negative Rs60mn). Lower revenues were offset by 28.7% QoQ plunge (9.5% YoY rise) with the cost-to-income ratio settling at 45.4%. Company targets: i) ARR asset growth of 25-30%, ii) overall retention ratio of 55bps, iii) reduction in cost-to-income to 45% in FY23 and 41-43% in FY24, iv) PAT CAGR of 20% over FY22-FY24E, v) tangible RoEs of >25% for FY23 and toward 30% for FY24.

Maintain BUY with an unchanged target price of Rs2,217 (24x FY24E earnings).

At 12:56 hrs IIFL Wealth Management Limited was quoting at Rs 1,620.15, down Rs 19.65, or 1.20 percent.

It has touched an intraday high of Rs 1,678.60 and an intraday low of Rs 1,606.95.

It was trading with volumes of 2,476 shares, compared to its thirty day average of 21,952 shares, a decrease of -88.72 percent.

In the previous trading session, the share closed up 0.01 percent or Rs 0.20 at Rs 1,639.80.

The share touched its 52-week high Rs 1,906.50 and 52-week low Rs 1,225.70 on 19 April, 2022 and 20 June, 2022, respectively.

Currently, it is trading 15.02 percent below its 52-week high and 32.18 percent above its 52-week low.

Market capitalisation stands at Rs 14,387.37 crore.