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Anand Rathi
IIFL Wealth (Buy)
Target: ₹1,297
CMP: ₹1117.45
Driven by AMC and good third party product sale, recurring assets grew 63 per cent, pushing up IIFL Wealth’s Q4 FY21 AUM 32 per cent y-o-y. On the upbeat guidance and strong FY21, we raise our FY22/23 AUM growth and net profit. Senior management and client attrition were consistently low.
At end-FY21, AUM had grown 32 per cent y-o-y to ₹2.07 lakh crore with the share of ARR assets in AUM rising from 33 per cent in FY16 to 49 per cent in FY21. We expect this to go up to 55 per cent by FY23. In ARR, IIFL One had 27 per cent of ARR AUM in FY21, vs 15 per cent two years ago. We expect it to clock a 34 per cent CAGR over FY21-23 to ₹49,900 crore, constituting 32 per cent of ARR AUM.
AIF-induced AMC AUM grew from ₹5,400 crore in FY16 to ₹37,300 crore in FY21, and is expected to clock a 30 per cent CAGR over FY21-23 to nearly ₹63,400 crore. FY21 income grew 24 per cent y-o-y to ₹1,050 crore.
The company achieved its guidance of FY21 AUM and improved that of FY22/23 to ₹2.45 lakh crore/₹2.85 lakh crore (earlier guidance for FY22 was ₹2.3 lakh crore).
Risks: Volatile capital markets, less-than-expected AUM growth, higher attrition rate of TLs, regulatory issues.
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