ICICI Securities shares: Should you buy, sell or hold after Q3 results?

Analysts retained their bullish view on ICICI Securities despite the brokerage last week reported around 27 per cent year-on-year (YoY) drop in net profit at Rs 279.11 crore for the quarter ended December 31, 2022. The figures stood at Rs 380.21 crore in the same period a year ago. On the other hand, revenue from operations also retreated 6.67 per cent YoY to Rs 878.79 crore during the quarter under view.

Meanwhile, the company saw its total client base expand cross 87 lakh, up 25 per cent YoY, with 3 lakh clients added during the quarter. Total client assets on the platform during the quarter touched Rs 6 lakh crore, up 7 per cent YoY out of which Rs 3.2 lakh crore pertains to its 76,000 plus private wealth customers, comprising of HNIs, UHNIs, and family offices.

While maintaining an ‘Accumulate’ rating on ICICI Securities, brokerage KR Choksey Shares and Securities said, “Continued weak base in retail broking business owing to weak cash volumes, ICICI Securities’ revenue is expected to stay cyclical and is likely to show moderate growth for the near term. The derivatives volume has remained robust and the uptick in customer activation is likely to aid the growth for the coming quarters.” KR Choksey Shares and Securities has set a target price of Rs 560 for ICICI Securities, indicating an upside of 12 per cent from the market price of Rs 500 on January 20.

On the other hand, Axis Securities has a ‘Buy’ call on ICICI Securities with a target price of Rs 600. “Even as near-term headwinds for the broking business continue to persist, we believe the company’s efforts to reduce dependence on the cyclical business and diversify revenue streams should lend some stability to overall revenue growth. ICICI Securities’ continued investments towards technology and franchise building will help the company build a scalable franchise,” Axis Securities said.

The brokerage further added that with cash market volumes or turnover remaining impacted, ICICI Securities’ broking revenues to remain under pressure.

“With a focus on non-broking products with a view to expanding the distribution suite (insurance and MF) along with scaling up the wealth management franchise will help support ICICI Securities’ revenue growth over the medium term,” Axis Securities said in a report.

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