ICICI Securities Ltd. share price target

ISEC witnessed a 6% YoY and 7% QoQ decline in revenue from the Retail Broking segment. For the eighth consecutive quarter, revenue has been in the INR3-3.5b range. Its customer count saw a 1.5x jump. While its Prime subscription fees has scaled up (up 71% YoY), its share in overall revenue is small. Revenue for the Issuer Services segment fell 41% QoQ to INR649m. Overall revenue grew 20% YoY to INR8.9b (inline) as the negative surprise in Issuer Services was offset by a beat in the Distribution segment. PAT at INR3.8b (+42% YoY) was 6% lower than our estimate, while C/I ratio rose...

We maintain our BUY recommendation on the stock with a revised target price of Rs 865/share (17x FY24E EPS), implying an upside of 38% from CMP.

We recommend a BUY rating on the stock with a target price of Rs 856/share, implying an upside of 10% from the CMP.

We continue to like ISEC for its superior ROE profile, better brand recall, and innovative product proposition across customer segments. We maintain a BUY rating on the stock and revise our target price to Rs 990/share (19x FY24E EPS), implying an upside of 21% from CMP.

ISEC witnessed flattish retail broking revenue for the seventh consecutive quarter despite improved traction in client acquisitions. However, this was more than offset by the strong performance in distribution, MTF books and investment banking revenue. Resultantly, ISEC's 3QFY22 revenue at INR9.4b (+52% YoY) was 10% higher than our forecasts. PAT at INR3.8b (+42% YoY) was ahead of our estimates by 11%, while the C/I ratio inched up 90bp sequentially to 45.9% driven by 11% rise in other expenses (mainly marketing costs and technology investments)....

ISEC is under transition, whereby the company is implementing several strategic initiatives across segments to emerge as a comprehensive financial solutions provider across customer cohorts. The margin norms, the last leg of which was implemented from 1st Sep'21, impacted ISEC's market share. These norms are now behind and the cash...

We maintain a BUY rating on the stock and revise a target price to Rs 940/share (20x Sept23E), implying an upside of 15% from CMP.

ISEC delivered yet another quarter of robust performance, with revenue (INR8.6b, 26% YoY) and PAT (INR3.5b, 26% YoY) beating our estimates by 9%. The C/I ratio inched up by 70bp sequentially to 45%, led by an 11%/34% rise in employee cost/other expenses (related to marketing cost and technology investments). Employee cost-to-total income stood ~20% v/s ~23% in FY21 and 29-32% over FY18-20. We have raised our FY22E/FY23E EPS estimates by ~5%/4% to factor in higher than expected traction in MTF, Distribution, and Investment...

ISEC delivered yet another quarter of robust performance, with revenue (INR8.6b, 26% YoY) and PAT (INR3.5b, 26% YoY) beating our estimates by 9%. The C/I ratio inched up by 70bp sequentially to 45%, led by an 11%/34% rise in employee cost/other expenses (related to marketing cost and technology investments). Employee cost-to-total income stood ~20% v/s ~23% in FY21 and 29-32% over FY18-20. We have raised our FY22E/FY23E EPS estimates by ~5%/4% to factor in higher than expected traction in MTF, Distribution, and Investment...

We recommend a BUY on the stock with a target price of Rs 832/share

We maintain our BUY recommendation on ISEC with a target price of Rs 870/share (19x Sep'23E EPS), implying an upside of 18% from CMP.

We initiate coverage with a BUY rating and a target price of Rs 870/share (19x Sept'23E EPS), implying an upside of 22% from CMP.

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...

4QFY21 was another robust quarter in an overall strong year for ISEC. PAT more than doubled YoY to INR3.3b (45% beat), driven by 54% growth in revenue, coupled with significantly lower C/I ratio. In FY21, ISEC delivered 50%/97% revenue/PAT growth. We increase our FY22E/FY23E EPS estimate by ~10% to factor in healthy brokerage revenue. Maintain Buy with a TP of INR650/share (18x FY23E EPS)....

11 September 2019 by deepening the partner network and enhancing the tie-up with ICICIB, 2) increasing wallet share of clients with a focus on ARPU, 3) providing a better engagement experience, 4) introducing digital agility, and 5) enhancing operational efficiency (i.e. reducing the C/I ratio). ISEC acquired 0.45m customers in FY20, largely similar to earlier years. While market share in terms of NSE-active clients improved 40bp YoY to 10% in FY20, the company is focused on increasing it further. ICICI Securities Over the past two years, ISEC has been focused on improving its digital capabilities and thus enhancing customer experience. The network of IFAs, sub-brokers, investment advisors (IAs), and accounts payables (APs) grew 32% YoY to 9,400+ in FY20, which further increased to 12,500+ in 1QFY21. As a result, the number of clients sourced through partnerships grew 70% YoY. ISEC launched a number of new propositions in the year.

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19 Securities ICICI May 2020 19 May 2020 ICICI Securities ISEC is focusing on generating higher average revenue per customer (ARPU) and customer acquisition, which should lead to superior overall volumes. Core to the ISEC strategy is ARPU (including distribution and lending revenues), and thus, cross-selling and innovative offerings are likely to be key initiatives in revenue generation. However, with trail commissions on net flows higher than those on the back book, yields improved to 66bp in 4QFY20. Commission yields are now stable/marginally improving and revenues should grow in line with AUM. In addition to providing an extra revenue stream, the distribution business also helps to reduce overall volatility of earnings stemming from the brokerage and investment banking segments. In addition to brokerage and distribution, other key revenue sources for ISEC include margin funding and investment banking.

While volumes continue to increase deteriorating mix, and increased competition is expected to keep yields down. Distribution revenues have bottomed out. ISEC is rapidly building loan assets which will drive earnings in the near term. All the above, along with new initiatives and cost control will drive earnings at FY20-22E CAGR of 17.9%. Our rating on ISEC remains a SELL, despite us raising target multiple to 18x (PEG=1), increasing our TP to Rs 435. Our TP implies a FY19-31E APAT CAGR of 17.3%. Risks: Uptick in equity markets coupled with increased retail participation. We attended ISECs sell side analyst day and were impressed by the strong client franchise, innovations and focus on adding value propositions (apart from pricing) for customers. While we appreciate the fundamental strength of ISECs business model, we believe valuations at FY21E/22E P/E of 23.5/20.8x are stretched. We rate ISEC a SELL with TP of Rs 435 (18x FY22E EPS).

While volumes increase deteriorating mix is expected to keep yields under check. Distribution revenues have bottomed out. ISEC is rapidly building loan assets which will drive earnings in the near term. All the above, along with cost control will drive earnings at FY20-22E CAGR of 17.9%. We increase FY20E/21E/22E APAT estimates by 0.6/4.8/5.1%, and continue to rate ISEC a SELL with a TP of Rs 376 (16x Dec-21E EPS). We believe 16x is a fair multiple for the stock given market linked nature of its business lines. A rally in equity markets coupled with increased retail participation remains a key risk. Higher core broking revenues and strong growth in funding book drive profits, while distribution and IB remain soft. Cost decline is lower than our expectation.