Buy IIFL Wealth; target of Rs 2200: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on IIFL Wealth

IIFLWAM’s PAT declined 5% QoQ, but grew 34% YoY to INR1.6b (4% beat) in 1QFY23. The beat on profitability was driven by a 5% beat on net revenue (down 11% QoQ but up 32% YoY to INR3.8b) owing to a 34% beat on Transaction/Brokerage Revenue (TBR), whereas Annual Recurring Revenue (ARR) was 4% lower than our estimate. Opex stood at INR1.7b, a decline of 29% QoQ / 9% YoY growth and 7% below our estimate. The sequential decline was mainly attributable to a sharp fall of 68% in variable employee expenses. Admin costs also declined 24% QoQ. The cost/income ratio came in at 44.5% (est. 50.4%), down 1,100bp QoQ, and 950bp YoY. Sequentially, net inflows moderated slightly to INR60.8b in 1QFY23 (excluding custody) from INR70.4b in 4QFY22. Gross closing AUM (excluding custody assets) dropped QoQ but posted 7% YoY growth, with a continued shift in the mix towards ARR assets. ARR’s share stood at 57% v/s 55% in 4QFY22. The share of ARR in overall revenue stood at 68% v/s 60% last quarter, with normalization of TBR revenue. Within ARR assets, IIFL One AUM saw a marginal dip of 1% QoQ.

Outlook

We maintain our BUY rating with a TP of INR2,200/share (premised on 25x FY24E EPS).

More Info

 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.

For all recommendations report, click here

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IIFL Wealth - 270722 - moti