Current Rating and Its Significance
MarketsMOJO currently assigns IIFL Finance Ltd a 'Buy' rating, supported by a Mojo Score of 71.0. This score reflects a positive outlook on the stock’s potential, signalling to investors that the company demonstrates favourable attributes across multiple key parameters. The 'Buy' rating suggests that the stock is expected to outperform the broader market over the medium to long term, making it an attractive option for investors seeking growth within the Non Banking Financial Company (NBFC) sector.
Quality Assessment: Strong Fundamentals Underpin Growth
As of 23 February 2026, IIFL Finance Ltd exhibits a strong quality grade, indicating robust fundamentals. The company maintains an average Return on Equity (ROE) of 14.17%, signalling efficient utilisation of shareholder capital to generate profits. This level of ROE is commendable within the NBFC sector, reflecting consistent operational strength and effective management strategies.
Moreover, the company’s recent quarterly results underscore its quality credentials. Net sales reached a record ₹3,427.45 crores, while Profit Before Depreciation, Interest, and Taxes (PBDIT) hit a high of ₹2,147.26 crores. Profit Before Tax excluding other income (PBT less OI) also marked a peak at ₹657.60 crores. These figures highlight the company’s ability to scale operations profitably and maintain a healthy earnings trajectory.
Valuation: Fair but Reasonable
The valuation grade for IIFL Finance Ltd is currently assessed as fair. While the stock is not undervalued, its price levels are justified by the company’s strong earnings growth and market position. Investors should note that the fair valuation reflects a balance between growth prospects and current market pricing, suggesting that the stock is reasonably priced relative to its intrinsic value and sector peers.
Financial Trend: Very Positive Momentum
The financial trend for IIFL Finance Ltd is rated very positive, supported by impressive growth metrics. The company reported a staggering 513.57% increase in net profit, a clear indicator of accelerating profitability. This surge in earnings is a key driver behind the positive financial outlook and supports the 'Buy' rating.
Institutional investors have recognised this momentum, with holdings rising to 36.93%, up by 1.03% from the previous quarter. Such increased institutional interest often reflects confidence in the company’s fundamentals and future prospects, as these investors typically conduct thorough due diligence before increasing stakes.
Technicals: Bullish Indicators Support Uptrend
From a technical perspective, IIFL Finance Ltd is currently rated bullish. Despite some short-term volatility, the stock’s price action over the past year has been strong, delivering a 56.02% return as of 23 February 2026. This performance significantly outpaces the broader BSE500 index, which returned 11.96% over the same period.
Shorter-term price movements show some correction, with a 21.08% decline over the past month and an 18.64% drop year-to-date. However, the six-month return remains positive at 5.45%, indicating resilience and potential for recovery. The bullish technical grade suggests that momentum indicators and chart patterns currently favour upward price movement, supporting the positive rating.
Market Capitalisation and Sector Positioning
IIFL Finance Ltd is classified as a smallcap within the NBFC sector. This positioning offers investors exposure to a company with growth potential that may not yet be fully recognised by the broader market. The NBFC sector itself remains a critical component of India’s financial ecosystem, providing credit and financial services beyond traditional banking channels.
Investor Implications: What the 'Buy' Rating Means
For investors, the 'Buy' rating on IIFL Finance Ltd indicates a recommendation to accumulate or hold the stock with an expectation of capital appreciation. The rating reflects confidence in the company’s ability to sustain earnings growth, maintain operational quality, and benefit from favourable market dynamics. While valuation is fair rather than cheap, the strong financial trend and bullish technical outlook provide a compelling case for investment.
Investors should consider the stock’s recent volatility and sector-specific risks but can take comfort from the robust institutional backing and solid fundamentals. The rating suggests that, over the medium term, IIFL Finance Ltd is well-positioned to deliver returns that exceed market averages.
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Stock Performance Overview
The latest data as of 23 February 2026 shows mixed short-term price movements but strong long-term gains. The stock declined marginally by 0.08% on the day, with a one-week loss of 2.37%. Over the past three months, the stock fell 8.84%, and the one-month performance was weaker at -21.08%. Despite these short-term fluctuations, the six-month return remains positive at 5.45%, and the one-year return is an impressive 56.02%, underscoring the stock’s capacity for substantial appreciation.
Institutional Confidence and Market Position
Institutional investors hold a significant 36.93% stake in IIFL Finance Ltd, reflecting strong confidence from well-informed market participants. The increase in institutional holdings by 1.03% over the previous quarter further reinforces the positive sentiment. Institutional backing often provides stability and can act as a catalyst for sustained stock performance.
Conclusion: A Balanced Yet Optimistic Outlook
In summary, IIFL Finance Ltd’s 'Buy' rating by MarketsMOJO is supported by strong quality fundamentals, a very positive financial trend, fair valuation, and bullish technical indicators. The company’s robust earnings growth, institutional support, and market-beating returns make it a compelling choice for investors seeking exposure to the NBFC sector.
While short-term price volatility warrants caution, the overall outlook remains optimistic. Investors should consider this rating as a signal of the stock’s potential to deliver superior returns relative to the broader market, backed by solid operational and financial performance.
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