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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.

Buoyant times
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Buoyant times

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.

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