ICICI Securities hits all-time high
Shares of ICICI Securities on Thursday gained 5 percent. It hit a fresh all-time high of Rs 552 on the BSE on the expectation of good earnings for the quarter ended June 2020 (Q1FY21). In the last month, the stock had outperformed the market by surging 38 percent, as compared to an 8 percent rise in the S&P BSE Sensex.
ICICI Securities is a subsidiary of ICICI Bank and a technology-based firm. It offers a wide range of financial services including investment banking institutional broking retail broking private wealth management and financial product distribution. It is one of the pioneers in the e-brokerage business in India.
Since May 7, post the January-March quarter (Q4FY20) earnings, the stock has rallied 53 percent from the level of Rs 361. During the quarter, the company saw continuing retail participation as a steep correction in such a short period provided many with an opportunity to enter the market at multi-year low prices.
“While quarterly average market ADTO was down 9 percent in 1QFY21E, strong cash volume, up 34 percent quarter on quarter (QoQ), will be key to a strong quarter for ICICI Securities. We expect broking revenue to go up 11 percent QoQ and 40 percent year on year (YoY) in 1QFY21E,” Elara Capital said in Q1FY21 preview.
A slower distribution income, as well as deals, might pull overall revenue down QoQ, although up 15 percent YoY. We expect the cost to moderate QoQ, down 9 percent, while up 9 percent YoY, as steps taken by management will take time to result in lower cost. We expect a 300bp QoQ and YoY expansion in the PBT margin to 48 percent. This coupled with lower taxation would see earnings rise by 42 percent YoY, it said.