IIFL Wealth Q3 Results Review - Decent Performance; Share Of ARR Continues To Rise: Motilal Oswal
IIFL Wealth Management’s profit after tax came in at Rs 1.7 billion, which is 12% lower than our estimates of Rs 1.95 billion.
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IIFL Wealth Management Ltd.’s profit after tax came in at Rs 1.7 billion, which is 12% lower than our estimates of Rs 1.95 billion owing to a negative Rs 50 million hit on forex of offshore assets and lower markt to market gains on treasury book.
Opex was in line with our forecast at Rs 1.9 billion and registered a 16% YoY decline owing to a 23% YoY reduction in employee costs. Resultantly, the cost/income ratio contracted 1,381 bps YoY to 44.9% (our estimate: 44.8%).
IIFL Wealth's total assets under management (excluding custody assets) rose 4.7% YoY to Rs 2.75 trillion with continued focus on scaling up annual recurring revenue assets. ARR AUM grew 19.8% YoY to Rs 1.66 trillion. ARR net flows were Rs 104 billion in Q3 FY23 while total net flows stood at Rs 60 billion.
Revenue/operating profit/profit after tax rose 20%/50%/22% YoY in nine months-FY23.
The board has approved a dividend of Rs 17/share, 1:1 split, and 1:1 bonus.
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