Markets
ICICI Securities is firing on all cylinders
Summary
The brokerage was able to hawk third-party products easily as its digital platform has gained traction
ICICI Securities Ltd’s September quarter reflected all the good things that come out of buoyant markets and active retail participation in equities. The brokerage reported a healthy growth in revenues, both on a sequential and year-on-year basis.
Revenues at ₹857 crore were up 26% from a year ago on the back of a broad-based growth at various verticals. The mainstay revenue source of retail equities and allied services grew at a decent 20% with its share steady at a little above 62% for the quarter. The second-largest source, distribution, showed a jump of 53% in revenues. In essence, the brokerage was able to hawk third-party products easily as its digital platform has gained traction after new product launches such as the ICICIdirect Markets app.
Yet another cheering metric from the brokerage was the addition of new customers, a record for a quarter. ICICI Securities added 5.8 million clients during the September quarter with the digital platform contributing the lion’s share. Interestingly, customers sourced from parent ICICI Bank have fallen to 23% from 55% a year ago. But the brokerage earns money only when its clients use its services actively. Here too, ICICI Securities seem to have improved. Its active client base grew 23% sequentially and is almost double from a year ago. The activation ratio improved to 74% from 63% in the June quarter. This augurs well for future revenues for the firm.
While the digital platform has brought down the cost of customer acquisition, the cost-to-income ratio showed a marginal rise to 45% for Q2. Notwithstanding a 25% rise in total expenses, net profit grew 26% to ₹351 crore and beat Street estimates marginally.
Shares of ICICI Securities have gained 6% over the past three months and the firm’s strong growth indicators for the September quarter could result in more upside.
