IIFL Securities: PAT growth of 113% & Revenue growth of 43% in H1-25 at a PE of 17
IIFLSEC at reasonable valuations based on business performance. All parts of the business delivering strongly. Strong industry tailwinds providing for an attractive outlook
1. Broking, financial product distribution & investment banking
iiflsecurities.com | indiainfoline.com | NSE : IIFLSEC
IIFL Securities along with its subsidiaries offers broking services, financial products distribution, institutional research and investment banking services.
2. FY20-24: PAT CAGR of 22% & Revenue CAGR of 31%
3. Strong FY24: PAT up 105% & Revenue up 60% YoY
4. Strong Q2-25: PAT up 91% & Revenue up 32% YoY
PAT up 13% & Revenue up 9% QoQ
5. Strong H1-25: PAT up 113% & Revenue up 43% YoY
6. Business metrics: Strong return ratios
7. Outlook: Strong outlook for FY25
i. Management pointing towards a strong outlook but unwilling to provide any guidance
Q2FY25 turned out to be yet another good quarter. Business momentum remained positive across all the segments with record number of investment banking deals, sustained growth in cross sell assets and better margin mix. Deal pipeline remains robust. Scaling up our technological capabilities and the wealth management business remain key areas of focus
Outlook for Indian Capital Markets related businesses is good over the medium to long term. And this is irrespective of any short-term hiccups that we may see. And outlook is strong primarily because of low penetration of financial products, increased financialization of savings, technology development and evolved regulatory regime.
8. PAT growth of 113% & Revenue growth of 43% in H1-25 at a PE of 17
9. Hold?
If I hold the stock then one may continue holding on to IIFLSEC.
IIFLSEC delivered the highest PAT in FY24, beating the previous high in FY22. H1-25 is indicating that FY25 will beat the previous high of FY24.
IIFLSEC has increased its PAT QoQ for the last 9 quarters, starting Q2-22. One can ride the business momentum as long as it runs.
All the IIFLSEC businesses are delivering growth with margin expansion.
Total brokerage revenue was up by 17% on Y-o-Y to ₹317.6 crores.
Investment Banking revenues were up 35% on Y-o-Y to ₹51.4 crores.
Thirteen deals were consummated during the quarter
Financial products distribution (FPD) revenues went up by 25% on Y-o-Y to ₹106.2 crores.
Profit after tax driven by margin expansion across all the businesses.
There is a strong tailwind and business momentum in favor of IIFLSEC
Business momentum remained positive across all the segments with record number of investment banking deals, sustained growth in cross sell assets and better margin mix
10. Buy?
If I am looking to enter IIFLSEC then
IIFLSEC has delivered PAT growth of 113% & Revenue growth of 43% in H1-25 at a PE of 17 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 17 makes the valuations quite attractive
IIFLSEC has real estate asset on the balance sheet which provides an upside as the assets are monetized.
Potential for a 11 PE re-rating to mid-teens PE is possible if IIFLSEC is able to match historic EPS growth of 20%+. Potential of a PE re-rating provide opportunity in IIFLSEC.
Previous coverage of IIFLSEC
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