ICICI Securities Ltd. share price target

We discontinue our estimates as we are dropping coverage with ISEC receiving approval for delisting.

Recommendation: Given that the company awaits approval from the regulatory authorities for delisting and will be delisted in the coming quarters, we continue to keep the stock Under Review'

Quarterly Update Q2FY24

Given that the company awaits approval from the exchanges for delisting and will be delisted in the next couple of quarters, we continue to keep the stock Under Review

Quarterly Update Q1FY24

We maintain our BUY recommendation on the stock.

ICICI Securities, a part of the ICICI Group and India’s leading wealth-tech firm meeting complete financial lifecycle needs of customers across investments, insurance and loan needs, today declared its financial and operational performance for the quarter ending 30th June 2023 (Q1FY24).

Initiating Coverage Report

We maintain our BUY recommendation on the stock on inexpensive valuations.

ICICI Securities (ISEC)’s overall revenue declined 7% YoY to INR8.8b in 3QFY23, In-line with our estimate as the weakness in retail brokerage and IB revenue was offset by strong interest rate-linked revenue (MTF and Treasury book).

Focus on quality customer acquisition – ICICI Securities (ISEC) will focus on acquiring quality customers with the potential to generate higher revenues along with exhibiting higher persistency.

In 3QFY23, ISEC delivered a profit of Rs2.8bn (-26% YoY / -6% QoQ). Broking revenue declined 5% QoQ driven by lower cash volumes – with cash / retail cash ADTO down 3/6% QoQ respectively.

I-Sec reported a revenue of INR 8,789 Mn, down 7% YoY, up 2% sequentially, due to overall toned-down industry growth across segments. The Retail Equities and Allied Business which includes lending towards MTF & ESOP, Prime & NEO subscription fees, reported revenues at INR5040 Mn, down 4% YoY. The Distribution Business reported revenues of INR1670 Mn in Q3FY23, up 2% YoY. EBITDA reported at INR 5,487.9 Mn (+4.8% qoq/ -9.7% yoy). EBITDA margin stood at 62.4% (140bps qoq / -220bps yoy), as employee expenses stood to INR 1,756Mn (-5.4% qoq / +1.6% yoy).

We maintain our BUY recommendation on the stock on the back of inexpensive valuations.

We continue to maintain our BUY recommendation on the stock with a revised target price of Rs 625/share (14x FY24E EPS), implying an upside of 23% from the CMP.

In 2QFY23, ISEC delivered a profit of Rs3.0bn (-14% YoY / + 10% QoQ).