ICICI Securities has given Buy recommendation for IIFL Wealth Management recommended buy rating on the stock with a target price of Rs 1527 in its rese with a target price of Rs. 1527 in its research report issued on May 21, 2021

ICICI Securities research report on IIFL Wealth Management

IIFL Wealth & Asset Management (IIFLW) reported Q4FY21 consolidated PAT of Rs1.03bn (up 5% QoQ) thereby exiting FY21 with PAT of Rs3.7bn (in line with our expectations). Earnings were characterised by continued build-up of recurring revenue assets (up 13% QoQ / 63% YoY), sustained traction in IIFL One (8% QoQ), and an uptick in transactional revenues too, more than offsetting elevated variable costs and lower return on loans. IIFLW stayed put on its strategic business priorities focusing on revenue and cost efficiency and capital rationalisation. There is improved visibility on steady retention rates, AUM growth at a CAGR of >15% for FY21-FY23E and ‘cost to income’ at 51-53%, which will support earnings CAGR of >15% over FY21-FY23E and scale up RoEs to 17% by FY23E.

Outlook

Maintain BUY with a revised target price of Rs 1,527 (assigning 27x FY23E earnings, earlier Rs 1,487).