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HDFC Securities gives buy tag to this multibagger stock despite 120% rise in 2021

Multibagger stock: HDFC Securities expects dividend yield of the company to improve to 3.7 per cent in FY23E from current 2.3 per cent. (Mint) — Multibagger stock: HDFC Securities expects dividend yield of the company to improve to 3.7 per cent in FY23E from current 2.3 per cent. **(Mint)**

2 min read . Updated: 20 Oct 2021, 03:15 PM IST Edited By Asit Manohar

This multibagger stock may go up to ₹135.50 apiece levels in next 6 months, says HDFC Securities report

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Multibagger stock: IIFL Securities shares are one of the multibagger stocks in 2021 as IIFL Securities share price has risen from ₹47.70 per share levels to ₹102.70 apiece levels (at 2:36 PM today on NSE), yielding around 120 per cent return to its shareholders. However, HDFC Securities still see gain up to 30 per cent in this stock in next two quarters. According to HDFC Securities fundamental research report, this multibagger stock may go up to ₹135.50 apiece levels in next 6 months.

Highlighting the valuations and strong earnings of IIFL Securities, HDFC Securities research report says, "IIFL Securities has been able to stabilize its retail market share both in the cash and derivatives segments, despite the implementation of the third phase of peak margin norms. In FY21, owing to strong tailwinds across all capital market business IIFL Securities had delivered strong performance. Going forward, despite an expectation of higher volatility, we expect strong earnings growth to continue. We have envisaged 11 per cent CAGR in top line and 13 per cent in bottom line over FY21-FY23E."

Expecting improvement in dividend yield, the HDFC Securities went on to add, "We expect dividend yield to improve to 3.7 per cent in FY23E from current 2.3 per cent. The stock is trading at a steep discount to its peers which we believe, will narrow gradually as the company has started gaining lost market share."

IIFL Securities has reported highest ever quarterly client addition at 1.5 lakh (includes Karvy customers) in Q1FY22. Also the company has started receiving encouraging response to its newly launched Z20 plan. "We believe that the sale of land bank and continuous rise in customer acquisition, strong Investment Banking pipeline, growing financial products distribution revenue especially from Mutual fund will be the key triggers for the stocks re-rating," brokerage report says.

On its suggestion to stock market investors in regard to IIFL Securities, HDFC Securities report said, "We feel that investors can buy IIFL Securities Limited at the LTP (currently around ₹102.70 apiece levels on NSE) and add on dips to ₹98 band. We expect the Base case fair value of ₹126 and the Bull case fair value of ₹135.5 over the next 2 quarters."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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