Motilal Oswal's research report on IIFL Wealth
IIFL Wealth (IIFLWAM)’s PAT increased 20% YoY and 10% QoQ to INR1.7b (3% miss) in 2QFY23. The miss on profitability was led by 4% higher-thanestimated operating expenses (OPEX; up 7% QoQ). The sequential increase in OPEX was attributable to a sharp 18% rise in variable employee expenses. Administration costs grew 12% QoQ. The cost/income (C/I) ratio of IIFLWAM contracted 810bp YoY, but expanded 240bp QoQ to 46.9% (est. 44.6%) in 2QFY23. Sequentially, net inflows were steady at INR61b (excluding custody). Revenue/op. profit/PAT rose 27%/52%/27% YoY, respectively, in 1HFY23. IIFLWAM’s Board approved a dividend of INR17/share.
Outlook
We maintain our BUY rating with a TP of INR2,300 (premised on 25x Sep’24E EPS).
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