IIFL Wealth up 14% on strong Q1 results, dividend bounty of Rs 35 per share

IIFL Finance
Shares of IIFL Wealth Management surged 14 per cent to Rs 1,580, also its 52-week high, on the BSE in the intra-day trade on Wednesday after the company reported a good set of numbers for the quarter ended June 2021 (Q1FY22). Its consolidated profit after tax (PAT) jumped 42 per cent year on year (YoY) at Rs 119 crore on back of strong operational performance, while sequentially, PAT grew 16 per cent. The company announced a special dividend of Rs 35 per share.

Its revenue from operations, meanwhile, stood at Rs 283 crore, up 7 per cent quarter on quarter (QoQ) and 43 per cent YoY. Total assets under management (AUM) grew 15 per cent QoQ to Rs 2.82 trillion.

The beat on profitability was driven by a 12 per cent beat on net revenues owing to both annual recurring revenue (ARR) and transactional/brokerage revenue (TBR), better operating efficiency, and a lower tax rate of 22.6 per cent.

The quarter witnessed strong net inflows of Rs 14,300 crore (including corporate treasury inflows of Rs 5,200 crore), of which Rs 9,700 crore belonged to ARR and Rs 4,600 to TBR. The quarter also witnessed an increase in the share of high yielding DPMS assets within IIFL ONE assets.

"Over the past decade, IIFL Wealth Management has evolved into one of the best wealth management franchises in India. It has also become one of the largest alternate asset managers, with unique product offerings. With IIFL ONE, the company is looking to change the way wealth management is offered in India. Traction in ARR assets and IIFL ONE, in particular, remains healthy. The quarter witnessed a glimpse of improving yield on IIFL ONE, which reached (reported: 33bp) targeted levels of 40bp. Over the last two quarters, net flows have been encouraging," Motilal Oswal Financial Services said in a result update.

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