Motilal Oswal has issued a buy rating on IIFL Finance with a target price of ₹700 in its research report dated July 23, 2026. According to the brokerage's analysis, the stock is currently trading at attractive valuations that justify the positive outlook. The recommendation is based on sum-of-the-parts (SoTP) valuation methodology, reflecting confidence in the company's business fundamentals and growth prospects.
IIFL Finance delivered robust financial results for the first quarter of FY27, with Net Interest Income (NII) growing 55% year-on-year and 16% quarter-on-quarter to approximately ₹20 billion. As reported by Motilal Oswal, this performance represented a 9% beat against estimates. Net total income expanded 32% year-on-year to ₹22 billion, which was in line with expectations. The company's cost-income ratio remained stable at 44.5% quarter-on-quarter, demonstrating operational efficiency improvements.
Other income for the quarter stood at ₹2 billion, representing a 52% miss compared to ₹3.7 billion in Q4FY26. According to Motilal Oswal's analysis, this shortfall was primarily due to assignment income of ₹749 million, which was significantly lower than the previous quarter's ₹2.1 billion. Despite the revenue mix challenges, the company's core NII performance remained strong, supporting the positive investment thesis.
The stock is currently trading at 1.5x FY27E P/BV and approximately 9x P/E for estimated Return on Assets (RoA) and Return on Equity (RoE) of 3.1% and 19% respectively in FY28. As reported by Motilal Oswal, these valuations appear attractive given the company's growth trajectory and operational improvements. The brokerage maintains its buy rating based on these favorable metrics and the company's strong quarterly performance.
