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Strong growth continues. IIFL Holdings reported higher-than-expected earnings due to strong performance in its wealth-management business. Broking income was down qoq due to marginal decline in market share. NBFC reported a lower NIM, even as the loan book was up 8% qoq. We continue to expect steady traction in the NBFC business; capital-market buoyancy should drive the broking and wealth businesses. We tweak estimates and rollover price target (December 2016) to `205 (`175 earlier). Retain BUY
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
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PAT up 67% yoy PAT (`1.12 bn, up 67% yoy) was 5% ahead of estimates. Overall income (including net interest income) was up 41% yoy to `5.5 bn on a 46% yoy growth in NII, a 21% growth in capitalmarket-related income and 164% growth in wealth-management income. Insurance distribution income was down 52% yoy, in line with the weakness in previous quarters. Costto-income ratio improved to 65% from 70% in 3QFY14, stable for the last three quarters. Segmental PBT increased by 77% to `1.8 bn, driven by disproportionate growth in broking and distribution. NBFC’s business share was down to 65% of segmental PBT from 78% in 3QFY14. Tweak estimates, retain BUY We are tweaking our estimates to factor higher wealth-management income, lower broking income and increases in operating expenses. IIFL is trading at a substantial discount to peers—at 11X FY2016E versus 17X PER for Motilal Oswal. Broking and wealth management have driven about 33% of its segmental earnings over the last nine months; both segments are directly or indirectly linked to capital markets. These businesses (broking and wealth, excluding NBFC’s valuation) are trading at 14X FY2016E PER. In this calculation, we value the NBFC business at 1.5X PBR for 17% medium-term RoE and 26% PAT CAGR in FY2014-17. We rollover our valuations to December 2016 and raise our SOTP-based price target to `205 from `175 earlier; retain BUY. We value the broking and wealth-management businesses at 12X PER and NBFC business at 1.5X PBR (from 1.3X earlier). After the earnings revision, we expect the NBFC business to deliver 17% RoE between FY2015-17.
LINK
http://www.kotaksecurities.com/pdf/indiadaily/indiadaily02022015ka.pdf
Strong growth continues. IIFL Holdings reported higher-than-expected earnings due to strong performance in its wealth-management business. Broking income was down qoq due to marginal decline in market share. NBFC reported a lower NIM, even as the loan book was up 8% qoq. We continue to expect steady traction in the NBFC business; capital-market buoyancy should drive the broking and wealth businesses. We tweak estimates and rollover price target (December 2016) to `205 (`175 earlier). Retain BUY
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
PAT up 67% yoy PAT (`1.12 bn, up 67% yoy) was 5% ahead of estimates. Overall income (including net interest income) was up 41% yoy to `5.5 bn on a 46% yoy growth in NII, a 21% growth in capitalmarket-related income and 164% growth in wealth-management income. Insurance distribution income was down 52% yoy, in line with the weakness in previous quarters. Costto-income ratio improved to 65% from 70% in 3QFY14, stable for the last three quarters. Segmental PBT increased by 77% to `1.8 bn, driven by disproportionate growth in broking and distribution. NBFC’s business share was down to 65% of segmental PBT from 78% in 3QFY14. Tweak estimates, retain BUY We are tweaking our estimates to factor higher wealth-management income, lower broking income and increases in operating expenses. IIFL is trading at a substantial discount to peers—at 11X FY2016E versus 17X PER for Motilal Oswal. Broking and wealth management have driven about 33% of its segmental earnings over the last nine months; both segments are directly or indirectly linked to capital markets. These businesses (broking and wealth, excluding NBFC’s valuation) are trading at 14X FY2016E PER. In this calculation, we value the NBFC business at 1.5X PBR for 17% medium-term RoE and 26% PAT CAGR in FY2014-17. We rollover our valuations to December 2016 and raise our SOTP-based price target to `205 from `175 earlier; retain BUY. We value the broking and wealth-management businesses at 12X PER and NBFC business at 1.5X PBR (from 1.3X earlier). After the earnings revision, we expect the NBFC business to deliver 17% RoE between FY2015-17.
LINK
http://www.kotaksecurities.com/pdf/indiadaily/indiadaily02022015ka.pdf
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