October 1, 2024

IIFL Securities zooms 73% in 2 mths, hits new high on strong earnings hope

TheSpuzz Desk06 mins
IIFL Securities zooms 73% in 2 mths, hits new high on strong earnings hope

Source: Business Standard

4 min read Last Updated : Oct 01 2024 | 1:11 PM IST

Shares of IIFL Securities hit a new high of Rs 372, having rallied 8 per cent on the BSE on Tuesday’s intra-day trade amid heavy volumes in an otherwise subdued market on expectations of strong earnings growth. Since April, thus far in the financial year 2024-25, the stock has skyrocketed 203 per cent.

In two months, the market price of the stock broking and allied services company has zoomed 73 per cent after the company reported a robust 144 per cent year-on-year (YoY) jump in its consolidated profit after tax (PAT) at Rs 182.3 crore, in June 2024 quarter (Q1FY25).

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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Total income for the quarter grew 57 per cent Y-o-Y to Rs 643.8 crore, led by growth in key business segments, including brokerage revenue (up 75 per cent YoY) and investment banking (up 25 per cent YoY).

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.

The management had said the company’s focus on placement of large blocks on the institutional side, improved revenue productivity in retail broking, continued acceleration in asset mobilisation on the products distribution side and the consummation of a number of capital market transactions helped it to report a strong YoY jump in revenues.

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.

In terms of market outlook, IIFL Securities, in its FY24 annual report, said Indian equity markets are in a goldilocks scenario over the medium- to long-term.

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. 

Moreover, sustained growth in domestic flows, both institutional (principally provident and pension funds) and non-institutional investors, and buoyancy in the profit cycle will likely keep valuations rich over the medium-term.

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



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