IIFL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | IIFL | Market Cap | 19,519 Cr. | Current Price | 459 ₹ | High / Low | 675 ₹ |
| Stock P/E | 16.9 | Book Value | 178 ₹ | Dividend Yield | 0.87 % | ROCE | 12.2 % |
| ROE | 16.4 % | Face Value | 2.00 ₹ | DMA 50 | 473 ₹ | DMA 200 | 492 ₹ |
| Chg in FII Hold | 0.39 % | Chg in DII Hold | -2.07 % | PAT Qtr | 509 Cr. | PAT Prev Qtr | 301 Cr. |
| RSI | 51.0 | MACD | -7.09 | Volume | 1,83,58,644 | Avg Vol 1Wk | 92,34,933 |
| Low price | 337 ₹ | High price | 675 ₹ | PEG Ratio | 1.32 | Debt to equity | 5.18 |
| 52w Index | 36.1 % | Qtr Profit Var | 1,225 % | EPS | 27.1 ₹ | Industry PE | 18.2 |
Core Financials:
IIFL shows moderate fundamentals. ROE is healthy at 16.4%, but ROCE is weaker at 12.2%. EPS at ₹27.1 is decent, supported by strong quarterly PAT growth (₹509 Cr vs ₹301 Cr). However, debt-to-equity is high at 5.18, raising leverage concerns.
Valuation:
Stock P/E of 16.9 is slightly below industry average (18.2), suggesting fair valuation. PEG ratio of 1.32 indicates moderate growth alignment. Price-to-book is ~2.58, reasonable but not cheap. Dividend yield of 0.87% provides limited income support.
Business Model & Health:
IIFL operates as a diversified financial services firm with strong retail lending and wealth management presence. Competitive advantage lies in its diversified portfolio and strong retail franchise. However, high leverage and volatility in institutional holdings limit stability.
Entry Zone:
Ideal entry zone: ₹420–₹440. Current price ₹459 is slightly above fair entry. Long-term holding is viable if debt levels reduce and ROCE improves.
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Positive
- Strong quarterly PAT growth (+1,225%)
- Healthy ROE (16.4%)
- EPS at ₹27.1 supports valuation
- P/E slightly below industry average
Limitation
- High debt-to-equity (5.18)
- ROCE relatively weak (12.2%)
- Technical weakness: RSI 51.0, negative MACD (-7.09)
- DII holdings declined (-2.07%)
Company Negative News
- Institutional confidence weakened with DII reduction
- Technical indicators show bearish momentum
Company Positive News
- Strong quarterly profit growth (₹509 Cr vs ₹301 Cr)
- FII holdings increased (+0.39%)
- Retail franchise continues to expand
Industry
Financial services sector trades at industry P/E of 18.2, supported by credit demand and diversified offerings. Peer firms show stronger ROCE and balance sheet efficiency, highlighting IIFL’s leverage risk.
Conclusion
IIFL offers moderate fundamentals with strong earnings momentum but high leverage risk. Rating: 3.4. Entry near ₹420–₹440 is preferable, with a 2–4 year horizon contingent on debt reduction and ROCE improvement. Exit strategy around ₹650–₹675 if fundamentals stagnate.
Would you like me to extend this into a peer comparison HTML table (IIFL vs IFCI vs IDFC First Bank) so you can benchmark valuation, ROE, ROCE, and debt side by side?