ICICI Securities tanks 6% on weak Q4 earnings; Motilal Oswal retains buy

NEW DELHI: Shares of ICICI Securities fell 6% in intraday trade on Thursday after the company posted weak results for the January-March quarter.

The consolidated net profit stood at Rs 263 crore for the quarter ended March, down 23% compared with Rs 340 crore in the corresponding period last year. Meanwhile, the revenue from operations during the reporting period stood at Rs 885 crore, marginally lower as against Rs 892 crore reported by the company year ago.

The stock was trading 3.26% lower at Rs 446 on NSE around 10:30 am.

Brokerage firm Motilal Oswal, however, maintained a buy rating on ICICI Securities with a price target of Rs 530, estimating a 15% upside. The target price is premised on 12X FY25E P/E of the company.

"I-SEC has seen tough times in the recent past due to high linkage of its revenue to broader equity markets. This has translated into a sharp decline in broking revenue as its dependence on cash volumes has been relatively higher. However, there has been stability in the past couple of quarters," Motilal Oswal note said.

"The primary issuances have been on weak footing amid a volatile equity market. I-SEC is now on the course of diversifying its revenue with the launch of several tools and products for the derivatives segment. Besides, the company has intensified its focus on increasing the penetration of MTF among its customers. The launch of new distribution products – loans and general insurance – will further enhance revenue in due course," it said.

On the cost front, I-SEC will continue to invest in human resources and technology, the brokerage opined.

Q4FY23 Highlights
- The income from interest for the quarter came in at Rs 287 crore, up 35% year-on-year, while brokerage income stood at Rs 310 crore.

- The Board of ICICI Securities has recommended a final dividend of Rs 9.25 per equity share of face value of Rs 5 each to the shareholders of the company which will be subject to their approval at the ensuing AGM.

- The final dividend will be paid to the shareholders within 30 days from the approval at the AGM.

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