Alpesh Mehta
EUR 120.00 For Business Accounts Only

MOSL: ICICI SECURITIES (Buy)-Strong performance across revenue streams

ICICI SECURITIES: Strong performance across revenue streams

(ISEC IN, Mkt Cap USD3.3b, CMP INR760, TP INR915, 20% Upside, Buy)


  • 1QFY22 was another robust quarter for ISEC, following an overall strong FY21. PAT was up 58% YoY to INR3.04b (33% beat), driven by 36% growth in revenue (18% beat). C/I ratio inched up ~430bp sequentially to 45%, led by a 42% rise in employee costs. In our view, variable expenses were front loaded during 1QFY22. Employee cost-to-total income stood ~20% v/s ~23% in FY21 and 29-32% over FY18-20.
  • Strong momentum in the capital market, coupled with a healthy deal pipeline in Investment Banking, has led us to raise our FY22E/FY23E EPS estimate by ~19%/25%. Operating leverage remains huge in this business. We maintain our Buy rating with a TP of INR915/share (21x FY23E EPS).


Retail Broking: Customer acquisition picks up; limited impact of phase II/III margin norms

  • ISEC added 390k new customers v/s 354k QoQ. Of this, ~270k customers were added through the Digital channel initiated last year. As per the management, the scale and mix that it is focusing on will lead to lower customer acquisition cost.
  • The activation rate witnessed a sharp decline (1,300bp QoQ) to 71% as customers sourced through ICICIB network were low. The number of NSE active clients increased to 1.9m from 1.6m QoQ.
  • Change in equity market share (down 40bp QoQ to 9.2%) is principally reflective of the change in mix towards Institutional volumes in Jun’21. As per the management, there has been no impact on its Retail market share.
ICICI Securities

ICICI Securities Ltd. ICICI Securities Limited is an India-based company. The Company offers a range of financial services including brokerage, financial product distribution and investment banking and focuses on both retail and institutional clients. The Company's segments include: Broking and commission is consists of its equity, currency and derivative brokerage services, the distribution of third-party products, research, and fees from financial planning/education; Advisory services, which consists of equity capital markets services and financial advisory services that cater to corporate clients, the government and financial sponsors; Investment and trading, which consists of treasury and proprietary trading activities.

Motilal Oswal
Motilal Oswal

​Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance. 

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

Alpesh Mehta

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