IIFL Finance - Expanded Footprint, Diverse Portfolio To Drive >20% RoE In Near-Term: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.We initiate coverage on IIFL Finance Ltd. with a 'Buy' rating and a target price of Rs 760. We believe IIFL Finance is a direct play on ‘increasing financial formalisation’ with its presence in high-growth segments. Its diversified product portfolio, along with strong more than 4,000 physical branches, focus on scaling high-margin products like gold loans, micro finance, digital loans etc., end-to-end digital process, tight control on asset quality and capital optimisation via co-lending could help it sustain more than 20% growth and 20% return on equity in the near term. IIFL Finance has transitioned itself into a diversified retail-focused non-banking financial company, with more than 60% of asset under management generating 17-23% yields. Its transformation journey began in FY19 with it selling its highly cyclical commercial vehicle business, and strategic move to reduce its reliance on wholesale business. As a result, the combined share of CV / construction equipment / construction / capital market fell to ~5% by FY23 from more than 30% in FY17. IIFL Finance aims to deliver 20-25% AUM growth in the near term with return on asset of more than 3.5% and RoE of more than 20%. We believe its redefined business model with a retail focus would help it in executing the strategies as per the plan..Click on the attachment to read the full report:.CRISIL - All Eyes On Growth In Global Businesses: Yes Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

IIFL Finance - Expanded Footprint, Diverse Portfolio To Drive >20% RoE In Near-Term: ICICI Securities

Initiates coverage with a 'Buy' rating and a target price of Rs 760,

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