IIFL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.2

🧾 Core Financial Analysis

📈 Profitability & Growth

PAT Qtr: ₹208 Cr vs ₹40.7 Cr — strong recent quarter, but Qtr Profit Var: –44.4% suggests inconsistency.

EPS: ₹8.92 — decent, but not exceptional for a ₹515 stock.

ROE (4.90%) & ROCE (8.81%) — below average, indicating inefficient capital deployment.

💰 Cash Flow & Debt

Debt-to-Equity: 4.15 — very high leverage, typical for NBFCs but still a red flag for risk.

Dividend Yield: 0.78% — modest income, not a major draw.

Cash Flow: Likely strained due to high debt and uneven profitability.

📊 Valuation Metrics

Metric Value Insight

P/E Ratio 38.7 Overvalued vs industry PE of 25.2

P/B Ratio ~1.76 Reasonable, but not compelling given low ROE

PEG Ratio –1.76 Negative PEG suggests declining earnings growth

Intrinsic Value Estimated ~₹400–₹440 Based on earnings and sector benchmarks

🏢 Business Model & Competitive Advantage

Sector: Non-Banking Financial Company (NBFC) — diversified lending and wealth management.

Model: Focus on retail loans, housing finance, and asset management.

Moat: Brand recognition and diversified financial services.

Growth Drivers: Expanding retail credit, digital lending, and cross-selling financial products.

Risks: High leverage, regulatory scrutiny, and earnings volatility.

📉 Technical & Sentiment Indicators

RSI: 55.8 — neutral to slightly bullish.

MACD: 12.8 — bullish crossover, momentum building.

DMA 50 & 200: Price above both — positive trend.

Volume: Above average — healthy trading interest.

💡 Investment Guidance

📌 Entry Zone (If Undervalued)

₹440–₹470 — aligns with intrinsic value and technical support.

Current price is above fair value, suggesting caution.

📈 Long-Term Holding View

Moderate-risk hold.

Business model is solid, but valuation is stretched and debt levels are concerning.

Long-term potential exists if earnings stabilize and leverage reduces.

Better suited for medium-term tactical exposure than deep long-term conviction.

Would you like a side-by-side comparison with Bajaj Finance or Muthoot Finance to explore stronger NBFCs with better fundamentals?

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