RBI ban on gold lending to dampen growth and profitability

06 Mar 2024
5 Min read 
  • IIFL Finance hosted a conference call to address the RBI's ban on gold lending.
  •  The ban is expected to dampen growth and profitability for IIFL Finance.
  •  It is uncertain how long it will take to get the ban reviewed and revoked.
  •  The company has taken corrective actions to address the issues raised by the RBI.
  •  Estimates for FY24/FY25/FY26 EPS have been revised lower to account for the impact of the ban.
  •  The company will need to work with existing customers and co-lending partners to prevent damage to its gold loan brand.
  •  Despite the ban, there will be no impact on recoveries or collections for IIFL Finance.
  •  The actual financial impact will depend on the duration of the ban.
  •  The stock has a BUY rating with a target price of INR560.
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