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Buy IIFL Wealth Management: target of Rs 1527: ICICI Securities

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ICICI Securities is bullish on IIFL Wealth Management recommended buy rating on the stock with a target price of Rs 1527 in its research report dated May 21, 2021.

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May 27, 2021 / 03:46 PM IST

An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

ICICI Securities research report on IIFL Wealth Management

IIFL Wealth & Asset Management (IIFLW) reported Q4FY21 consolidated PAT of Rs1.03bn (up 5% QoQ) thereby exiting FY21 with PAT of Rs3.7bn (in line with our expectations). Earnings were characterised by continued build-up of recurring revenue assets (up 13% QoQ / 63% YoY), sustained traction in IIFL One (8% QoQ), and an uptick in transactional revenues too, more than offsetting elevated variable costs and lower return on loans. IIFLW stayed put on its strategic business priorities focusing on revenue and cost efficiency and capital rationalisation. There is improved visibility on steady retention rates, AUM growth at a CAGR of >15% for FY21-FY23E and ‘cost to income’ at 51-53%, which will support earnings CAGR of >15% over FY21-FY23E and scale up RoEs to 17% by FY23E.

Outlook

Maintain BUY with a revised target price of Rs 1,527 (assigning 27x FY23E earnings, earlier Rs 1,487).

For all recommendations report, click here

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