IIFL Securities: PAT growth of 105% & Revenue growth of 60% in FY24 at a PE of 10
IIFLSEC at attractive valuations on account of real estate assets and cash on books. Valuations supported by strong tailwinds & business performance resulting in highest PAT in FY24
1. Broking, financial product distribution & investment banking
iiflsecurities.com | indiainfoline.com | NSE : IIFLSEC
IIFL Securities along with its subsidiaries offers advisory and broking services, financial products distribution, institutional research and investment banking services.
We have three segments which are targeting.
One is institutional broking where our team continues to do well. We are known for our research.
Investment banking again in the mid-market space we're trying to build capacities and
Last, but not the least is I would say instead of derivatives broking or chasing market share in broking we were more focused on the financial planning on the affluent segment.
Business offerings comprise equity, commodities and currency broking, Demat services, portfolio advisory and distribution of investment products
2. FY20-24: PAT CAGR of 22% & Revenue CAGR of 31%
3. Weak FY23: PAT down 19% and Revenue up 10% YoY
4. Strong 9M-24: PAT up 104% & Revenue up 55% YoY
5. Strong Q3-24: PAT up 109% & Revenue up 71% YoY
PAT up 20% & Revenue up 23% QoQ
6. Strong FY24: PAT up 105% & Revenue up 60% YoY
7. Business metrics: Strong return ratios
8. Outlook: Strong PAT growth in FY24
i. Management unwilling to provide any outlook for the future
9. PAT growth of 105% & Revenue growth of 60% in FY24 at a PE of 10
10. So Wait and Watch
If I hold the stock then one may continue holding on to IIFLSEC.
Coverage of IIFLSEC was initiated after Q2-24 results. The investment thesis has not changed after a strong FY24. IIFLSEC has delivered the highest PAT, beating the previous high made in FY22.
There is a strong tailwind and business momentum working in favor of IIFLSEC
In FY 24, we reported an all-time high net profit of Rs.512 crs. We witnessed strong growth in all our business segments. Our Institutional broking and Investment banking franchise has significantly improved their competitive position with stellar operating performance. Indian capital market businesses will continue to witness secular growth given multiple tailwinds over the next decade.
11. Or, join the ride
If I am looking to enter IIFLSEC then
IIFLSEC has delivered PAT growth of 105% & Revenue growth of 60% in FY24 at a PE of 10 which makes valuations quite attractive.
One can hope that IIFLSEC will continue with its track records of growing its net-worth and EPS at a CAGR of around 20% which at a PE of 10 makes the valuations quite attractive
IIFLSEC had cash and cash equivalents of Rs 408 cr as of FY24 end. Additionally, Rs 650 cr worth of real estate asset is on the balance sheet. Rs 1000+ cr of assets or about 20% of market cap is available as cash & real estate within the IIFLSEC market cap of Rs 5,072 cr. This makes the core business of IIFLSEC quite attractive.
The potential for a 10 PE moving to a a mid teen PE is easily possible if IIFLSEC is able to deliver growth consistently across quarters. The potential of a PE re-rating could provide multi-bagger upside in the stock over the medium term.
Previous coverage of IIFLSEC
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