ICICI Securities – Flash Equity Research Report

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HIGHLIGHTs:

  • ICICI Securities – one of the few companies which gave extraordinary results for Q4FY20 when most of the company’s revenue and profit declined a lot. Revenue grew by 18% and Profit Grew by 28%.
  • The company has been rated as the number 1 Equity Franchise.
  • The company is growing extraordinarily in the broking business. Brokerage Revenue in Q4FY20 grew by 26% YoY. India’s second-largest broker with active clients. Operational accounts CAGR growth in 6 years 12% from 2.5mn to 4.7mn.
  • Not only in the broking business, but the company is also ranked among the largest wealth manager in the country with AUM over Rs 830 bn.
  • MAJOR TRIGGER is the lost trust in small brokers after the episode of Karvy and India Nivesh which is helping them in three ways:

1) Existing clients shifting to big players

2)New Clients are opening accounts in Big names only.

3)Also, the surge has been seen in the opening of new broking accounts

  • The company enjoys trust among clients, around 40% of active clients are with the company for more than 14 years and 65% of revenue has come from clients who have been with the company for more than 5 years.
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FUNDAMENTALS

  • Profit grew by 60% in 3 years from 339cr to 542cr.
  • ROCE and ROE one of the best around 48%.
  • Trading at a PE of 24, growth and business can give a much higher PE.
  • The company has a dividend yield of around 2.5%.
  • Promoter holding around 79% and Institution holding 14.6%.
  • Interest Coverage ratio stands at 9.7 times.

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Arman Nahar
C.A. who is a USA CFA L3 candidate | Cleared L1 & L2 | Doing independent equity research since 2016 | Screens stocks for investment | Makes in-depth valuation models | Crafts portfolios.
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