200% Payout: Should I Purchase NBFC Stock at Rs 4 Per Share Dividend When It Expires This Week?

IIFL Finance has declared an equity dividend of 200.00% with a face value of Rs 2 (or Rs 4 per share) for the fiscal year that concluded in March 2023. At the present share price of Rs 641.90, the dividend yield is 0.62%. Over the preceding five years, the firm has consistently paid dividends, demonstrating its good dividend history. Trendline records show that from January 24, 2006, IIFL Finance Ltd. has paid out 21 dividends.

Financials of IIFL Finance
The company declared net profit after tax of Rs. 545 Cr for the quarter ended December 31, 2023, a 29% increase from the Rs 423.2 Cr recorded in Q3FY23. The firm released a statement stating that loans against property grew by 27% to Rs 7,862 crore, digital loans jumped by 96% to Rs 3,905 crore, and microfinance expanded by 54% to Rs 12,090 crore.

The company reported that its total revenue grew by 28%, from Rs 1,318.4 Cr in Q3FY23 to Rs 1,687.5 Cr in Q3FY24. Its loan AUM increased 34% year over year from Rs 57,941 Cr in the previous quarter to Rs 77,444 Cr in the current quarter, while the AUM of its gold and house loans increased by 35% and 25%, respectively, year over year. The business’s annualized ROE and ROA in Q3FY24 were 3.8% and 19.7%, respectively. During Q3FY24, the net non-performing assets ratio decreased from 1.1 to 0.9 and the gross non-performing assets ratio decreased from 2.1% to 1.7, indicating an overall improvement in asset quality.

Target Share Price for IIFL Finance
“IIFL has evolved into a franchise with an extensive co-lending presence, a strong distribution network, and exceptional digital loan origination and underwriting skills. During FY23–FY26E, it may efficiently use fintech relationships to generate a ~25% AUM CAGR. In the medium run, we think the firm can stably produce a RoE of 20%+. The stock has a PAT CAGR of around 27% during FY23-FY26E, trading at 1.9x FY25E P/BV and ~10x P/E. As investors become more confident in IIFL’s core retail sector, additional re-rating is anticipated. Motilal Oswal said, “We have a TP of INR800 and a BUY rating on the stock.”

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