IIFL Securities Receives 'Hold' Rating from MarketsMOJO, Caution for Potential Investors

IIFL Securities, a midcap finance and NBFC company, has recently received a 'Hold' rating from MarketsMOJO on November 11, 2024. This downgrade is based on the company's strong long-term fundamental strength, with an average Return on Equity (ROE) of 20.84%.
Despite a growth in net profit of 12.65%, the company has declared very positive results in September 2024. In fact, IIFL Securities has consistently reported positive results for the last 7 quarters. Its net sales have also seen a significant growth of 40.31% at Rs 1,285.29 crore, with the highest PAT (Q) at Rs 205.06 crore and EPS (Q) at Rs 6.64.

Technically, the stock is in a mildly bullish range, with both MACD and KST technical factors showing a bullish trend. Additionally, the company has a high institutional holding of 22.7%, indicating that these investors have better capability and resources to analyze the fundamentals of companies compared to retail investors. In fact, their stake in IIFL Securities has increased by 2.01% over the previous quarter.

In terms of performance, IIFL Securities has been beating the market in both the long-term and near-term. It has generated a return of 197.48% in the last year and has outperformed BSE 500 in the last 3 years, 1 year, and 3 months.

However, the company's long-term growth has been poor, with operating profit growing at an annual rate of only 2.77%. This, coupled with an expensive valuation of 4.9 Price to Book Value and a PEG ratio of 0.1, suggests that the stock may not be a good investment option for the long-term.

In conclusion, while IIFL Securities has shown strong fundamental strength and positive results in the recent past, the downgrade to a 'Hold' rating by MarketsMOJO indicates caution for potential investors. It is important to carefully analyze the company's long-term growth and valuation before making any investment decisions.