IIFL Finance Receives 'Sell' Rating from MarketsMOJO, But Strong Fundamentals and Attractive Valuation Remain

IIFL Finance, a leading finance and non-banking financial company (NBFC) in the largecap industry, has recently received a 'Sell' rating from MarketsMOJO on September 25, 2024.

The downgrade is based on the company's poor long-term growth, with net sales growing at an annual rate of 16.13% and operating profit at 5.04%. In addition, the company's financial results for the quarter ending June 24 have shown a decline in profits, with PAT(Q) at Rs 288.06 crore, falling by -32.3%, and PBT LESS OI(Q) at its lowest at Rs 424.17 crore. The EPS(Q) has also dropped to its lowest at Rs 6.79.

Technically, the stock is in a mildly bearish range, with the technical trend deteriorating from sideways on September 25, 2024, and generating -3.07% returns since then. The MACD and KST technical factors are also mildly bearish.

In the last year, the stock has significantly underperformed the market (BSE 500), which has generated returns of 40.34%. In contrast, IIFL Finance has generated negative returns of -10.67%.

However, the company does have strong long-term fundamental strength, with an average Return on Equity (ROE) of 15.76%. It also has an attractive valuation with a Price to Book Value of 2. The stock is currently trading at a fair value compared to its average historical valuations. Despite the negative returns in the past year, the company's profits have risen by 1.9%.

Moreover, IIFL Finance has a high institutional holding of 37.75%, indicating that these investors have better capability and resources to analyze the company's fundamentals compared to retail investors.

In conclusion, while IIFL Finance may have received a 'Sell' rating from MarketsMOJO, it is essential to consider all factors before making any investment decisions. The company's strong long-term fundamental strength and attractive valuation may still make it a viable option for some investors.