IIFLWAM’s 1QFY21 PAT grew 33% YoY to INR819m (63% beat), driven by 8%/7% beat on core revenues/opex. Stronger-than-expected top line was largely due to higher transaction (TBR) revenue (INR710m v/s est. INR500m). Operating expenses were down 20% QoQ (up 2% YoY) to INR1.3b (7% beat), driven largely by lower employee cost. As the company pruned salaries, fixed cost declined ~10% QoQ. In addition, ESOP cost more than halved QoQ to INR140m. Management is targeting to reduce the C/I ratio to 50% over the next 18 months (~64% in 1QFY21). IIFLWAM acquired L&T Wealth during the quarter stood for INR2.96b, which has led to Goodwill accretion of INR2.44b. The business has contributed 5.4%/7.2% /4.5% of the overall/ARR/TBR AUM in 1QFY21. Total Goodwill on the balance sheet now stands at INR5.2b (17% of net worth). Overall core performance was in line with expectation – both on the AUM and earnings front. Traction on ARR assets is a key monitorable for the ensuing quarters. Our earnings estimates remain largely unchanged for FY21/22E. Reiterate Buy.
OutlookWe largely maintain our FY21/22E EPS estimates. Buy with TP of INR1,240 (25x FY22E EPS).
For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
Read More
