IIFL Securities zooms 73% in 2 mths, hits new high on strong earnings hope
Source: Business Standard
The company’s net profit growth was driven by high operating leverage across all its businesses. The company had posted a PAT of Rs 74.6 crore in Q1FY24.
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Financial products distribution (FPD) revenues went up by 25 per cent YoY, while FPD asset under management (AUM) stood at Rs 29,049 crore. Within this segment, systematic investment plan (SIP) transactions witnessed an even faster growth, IIFL Securities had said.
Margin expansion led by better operating leverage drove an even faster growth in profits. “With equity markets hitting new highs, the cyclical tailwinds for our businesses remain benign,” the management had said.
IIFL Securities, along with its subsidiaries, offers brokerage services, financial products distribution, institutional research and investment banking services. The company’s board has also approved to change the name of the company from ‘IIFL Securities’ to ‘IIFL Capital Services’, subject to regulatory and other customary approvals.
At 12:20 PM, IIFL Securities was trading 7 per cent higher at Rs 370, compared to the 0.12 per cent rise in the BSE Sensex. The average trading volumes on the counter more than doubled on Tuesday, with a combined 1.5 million shares changing hands on the NSE and BSE.
The outlook for Indian capital market related businesses continues to be positive over the medium- to long-term. This is primarily due to low penetration of financial products, increased financialisation of savings, technology development and an evolved regulatory regime.
With sustained momentum expected in India’s economic growth, IIFL Securities is confident of witnessing secular growth, going ahead. Further, the government’s focus on capital expenditure, increased foreign investment, robust capacity utilisation in manufacturing, double-digit credit growth, and moderation in commodity prices are expected to continue providing support to manufacturing and investment-related activities.
India’s robust macro-economic stability, sanguine growth outlook, thriving entrepreneurship, improving productivity, rising capital spend, sustained improvement in infrastructure, solid policy support, healthy corporate balance sheets and widening breadth, all bode well for the economy.
Having said that, the sharp run up in the markets in the past 6-12 months has resulted in pockets of excessive valuations.
However, Indian equities have delivered superior risk-adjusted returns over the past three decades and we see no reason why it will not do so in the coming decades, the company said.
First Published: Oct 01 2024 | 1:04 PM IST
