Check Before You Invest : IIFL Finance Ltd

BSE: 532636 NSE: IIFL ISIN: INE530B01024

| Sector: BFSI | Industry: Finance - NBFC

Snapshot

Q.1 Which industry/sub-sector does IIFL Finance Ltd belong to?

IIFL Finance Ltd belongs to the BFSI sector, operating specifically within the Finance - NBFC segment.

Q.2 Is IIFL Finance Ltd a good quality company?

IIFL Finance Ltd is a average quality company, based on a somewhat consistent 10-year financial track record.

Q.3 Is IIFL Finance Ltd undervalued or overvalued?

IIFL Finance Ltd appears Somewhat Undervalued, as its key valuation ratios are below with their past averages.

Q.4 Is IIFL Finance Ltd a good buy now?

IIFL Finance Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of IIFL Finance Ltd?

IIFL Finance Ltd Operating Income growth is -11.7% for FY-2025, which is below its 5-year CAGR of 8.94%, indicating slower growth.

Q.2 Return on Assets of IIFL Finance Ltd?

IIFL Finance Ltd Return on Asset is -1.4%, which is below its 5-year historical median of 2.3%, indicating deteriorated earnings on assets.

	Current Level	5-year Historic Median
NPM%	-10.07	12.7
PPOP%	-70.63	7.83
RoA%	-1.4	2.3

Q.3 Return on Equity (ROE) of IIFL Finance Ltd?

IIFL Finance Ltd Return on Equity is -6.8% for FY-2025, which is below its 5-year historical median of 11%, indicating the business is making worse use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of IIFL Finance Ltd?

IIFL Finance Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is -70.63% for FY-2025, which is below its 5-year median(7.83%), indicating decreasing margins.

Q.5 Net Profit Margin of IIFL Finance Ltd?

IIFL Finance Ltd Net Profit Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is -10.07% for FY-2025, which is below its 5-year median( 12.7%), indicating decreasing margins.

Q.6 Total Asset growth of IIFL Finance Ltd?

IIFL Finance Ltd Total Asset growth is 15.73% for FY-2025, which is above its 5-year CAGR of 10.69%, indicating faster growth.

Q.7 Capital Adequacy ratio of IIFL Finance Ltd?

IIFL Finance Ltd Capital Adequacy ratio (CAR) is 18.5% for FY-2025, which is above the regulatory requirement of 15%, indicating strong capital position.

Q.8 Asset Quality of IIFL Finance Ltd?

IIFL Finance Ltd Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 2.23% for FY-2025, which is in line with its 5-year median 2.23%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 0.69% which is below its 5-year median( 0.98%), indicating improving asset quality.

Ownership & governance

Q.1 Promoter shareholding and pledge status of IIFL Finance Ltd?

Promoters hold 24.85% of the IIFL Finance Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of IIFL Finance Ltd vs Industry Peers?

IIFL Finance Ltd AUM CAGR is 10.69%, compared to the 5-year industry median CAGR of 9.9%, indicating faster growth and gaining its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of IIFL Finance Ltd vs industry peers

IIFL Finance Ltd profit metrics are in line with the industry median level of 7.31%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	-10.07	15.95
PPOP%	-70.63	4.54
RoA%	-1.4	1.45

Q.3 Operating efficiency of IIFL Finance Ltd vs industry peers?

IIFL Finance Ltd ROCE (10.4) is above the industry median of (4.4); while the current ROE (11) are above than the 5-year average Industry ROE (2.7). This shows that the business is positioned in the top quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM%	-10.07	15.95
PPOP%	-70.63	4.54
RoA%	-1.4	1.45
ROCE%	4.6	4.4
ROE%	-6.8	2.7

Valuation & price assessment

Q.1 Stock return of IIFL Finance Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 8.2% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	8.2%	12.1%	0.4%	29.8%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	16.91	24.42	28.96
Price to Book	2.58	2.93	1.11
Price to Sales	2.62	3.94	9.10
EV to EBITDA	7.53	11.05	11.77

Q.4 Valuation ratios of IIFL Finance Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 2.58% is lower than its historical median of 2.93%, indicating that at the current price the stock is undervalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

IIFL Finance Ltd return on invested capital (ROIC) is 3.13% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 13.5%, indicating value erosion.

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