Mehabe score: 3 G Factor: 3 Piotski Score: 6 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 6.
Description
IIFL Wealth Management is mainly engaged in the business of wealth manager and provides services relating to financial products distribution, advisory, portfolio management services by mobilizing funds and assets of various classes of investors including High Networth Individuals.Site:IIFLWAMMain Symbol:IIFLWAM
Stock trades at 1572.0, above its 50dma 1526.3. It also trades above its 200dma 1299.49. The stock remains bullish on techicals
The 52 week high is at 1818.00 and the 52week low is at 856.90
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has been maintaining a healthy dividend payout of 91.96%
Weakness
– Stock is trading at 4.92 times its book value
– has a low return on equity of 11.49% for last 3 years.
Competition
– The industry trades at a mean P/E of 23.7x. SBI Cards trades at the industry’s max P/E of 119.64x. IIFLWAM trades at a P/E of 34.4x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 6.0. IIFLWAM has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is -0.7%. The max 1- month return was given by SBI Cards: a return of 9.27 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 486.0 cr compared to Rs 387.0 cr for period ended Sep 2020, a rise of 25.6%
Operating Profits reported at Rs 269.0 cr for period ended Sep 2021 vis-vis 223.0 for period ended Sep 2020 .
Operating Margins contracted -227.3 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 16.11 compared to Rs 13.29 for previous quarter ended Jun 2021 and Rs 9.97 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1742.0 cr for period ended TTM vis-vis sales of Rs 1654.0 cr for the period ended Mar 2021, a growth of 5.1%. The 3 year sales cagr stood at 3.4%.
Operating margins shrank to 54.0% for period ended TTM vis-vis 57.0% for period ended Mar 2021, contraction of 300.0 bps.
Net Profit reported at Rs 459.0 cr for period ended TTM vis-vis sales of Rs 369.0 cr for the period ended Mar 2021, rising 19.6%.
Company recorded a Net Profit CAGR of 7.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 13.0% compared to 11.0% over the last 3 Years. – The stock has given a return of 75% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is 6% vis-vis a compounded sales growth of -1% over the last 3 Years. – The compounded profit growth on a TTM basis is 82% vis-vis a compounded profit growth of -1% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 25.67% vis-vis 24.91% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 50.16% vis-vis 50.82% for Jun 2021
Conclusion
– has reduced debt.
– has been maintaining a healthy dividend payout of 91.96% – Stock is trading at 4.92 times its book value
– has a low return on equity of 11.49% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 1526.3 and is trading at 1572.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
