200% Payout: NBFC Stock To Hit Ex-Date This Week For Rs 4/Share Dividend; Buy?

As of Saturday's closing session, IIFL Finance Ltd., a large-cap NBFC firm, has a market valuation of Rs 24,487.40 Cr. In India, IIFL Finance Ltd., together with its subsidiaries IIFL Home Finance Limited and IIFL Samasta Finance Limited, is a top diversified NBFC with a retail emphasis that offers loans and mortgages. The firm will be the attention of market observers this week as the shares will trade ex-date on January 25th for the interim dividend of Rs 4 per share for FY24.

IIFL Finance Dividend

For the Financial Year 2023-2024, the company's Board of Directors has announced an interim dividend of Rs. 4/-per equity share with a face value of Rs. 2/-per share. The Board fixed Thursday, January 25, 2024, as the record date and the aforementioned interim dividend shall be issued on or before February 15, 2024, as per a stock exchange filing.

An equity dividend of 200.00% with a face value of Rs 2 (or Rs 4 per share) has been issued by IIFL Finance for the financial year ended in March 2023. The dividend yield at the current share price of Rs 641.90 is 0.62%. The company has a strong dividend history and has paid out dividends on a regular basis over the previous five years. IIFL Finance Ltd. has issued 21 dividends since January 24, 2006, according to Trendlyne statistics.

IIFL Finance Financials

For the quarter ending December 31, 2023, the firm reported net profit after tax of Rs. 545 Cr, a 29% rise from Rs 423.2 Cr reported in Q3FY23. According to the company's statement, microfinance climbed by 54% to Rs 12,090 crore, digital loans increased by 96% to Rs 3,905 crore, and loans against property increased by 27% to Rs 7,862 crore.

The firm stated that from Rs 1,318.4 Cr in Q3FY23 to Rs 1,687.5 Cr in Q3FY24, its total income increased by 28%. Its loan AUM jumped 34% YoY from Rs 57,941 Cr in the year-ago quarter to Rs 77,444 Cr in the quarter under review whereas gold loans and home loans AUM grew by 35% and 25% y-o-y respectively. In Q3FY24, the company's annualised ROE and ROA were 3.8% and 19.7%, respectively. Overall asset quality strengthened as the net non-performing assets ratio dropped from 1.1 to 0.9 and the gross non-performing assets ratio from 2.1% to 1.7 during Q3FY24.

IIFL Finance Share Price Target

"IIFL has morphed into a franchise that has a robust distribution network, strong presence in co-lending, and superior digital loan origination and underwriting capabilities. It can effectively leverage fintech partnerships to deliver ~25% AUM CAGR over FY23-FY26E. We believe the company can sustainably deliver RoE of 20%+ in the medium term. The stock trades at 1.9x FY25E P/BV and ~10x P/E for a PAT CAGR of ~27% over FY23-FY26E. IIFL can see further re-rating as investors get more confidence in its core retail business. We have a BUY rating on the stock and a TP of INR800," said Motilal Oswal.

Disclaimer

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