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07 May 2020

I-Sec Q4FY20 and FY20 Results

Q4FY20 Performance Highlights

  • Revenue at 482 crore, up 13% YoY
  • PAT at 156 crore, up 28% YoY
  • Retail equities and allied revenue at 292 crore, up 35% YoY
  • 1.48 million active clients; ~1.1L new clients added in Q4FY20
  • NSE active market share up 40 bps YoY to 10%
  • Private Wealth Management revenue up 53% to 87 crore YoY
  • Final dividend @ 6.75/ share, amounting to full year dividend of 11/share

FY20 Performance Highlights

Revenue at 1,725 crore, almost flat YoY

PAT at 542 crore, up 10% YoY

Return on Equity (RoE) at ~ 48%.

Mumbai, May 7, 2020 - ICICI Securities (I-Sec), a part of the ICICI Group and India's leading retail led equity franchise, distributor of financial products, and investment banker, today announced the financial results for the quarter (Q4FY20) and 12-month (FY20) period ending March 31, 2020.

Q4FY20 Performance

The company reported consolidated revenue of 482 crore in Q4FY20, against 428 crore in Q4FY19, up 13%, aided by growth in retail equities & allied business.Consolidated Profit After Tax (PAT) for Q4FY20 stood at 156 crore, Vs 122 crore in Q4FY19, up 28%,on account of growth in revenue and changes in statutory tax rates.

The company announced a final dividend of 135%, amounting to 6.75 per share (of 5 face value), taking the full year dividend to 220%, or 11 per share.

Business Highlights

I-Sec has 4.8 million operational accounts, of which about 1.1L were added during the quarter. The company has 1.48 million active clients (those having traded in the last 12 months) and ~1.08 million NSE active clients (those having traded on the NSE in the last 12 months), up 16% and 27% respectively. During the quarter, I-Sec's NSE active market share grew ~40 basis points on-year to 10%.

In a major path-breaking initiative during the quarter, I-Sec opened up the I-direct platform, allowing even non ICICI Bank account holders to trade on I-direct almost instantly post completing a completely digital onboarding process. This allows I-sec to target even non ICICI Bank customers to achieve its growth objectives. The existing arrangement of acquiring ICICI Bank customers, working in tandem with ICICI Bank, continues and is ramping up well, reflecting in active client growth and market share.

The quarter witnessed one of biggest quarterly fall in Nifty, which fell by 29% in Q4FY20, down 23% in March alone. The period also saw high volatility and yet the icicidirect.com platform ensured unrestricted services even with volumes touching unprecedented peaks of processing 3.2 million orders plus trades per day, up from earlier peak of 2 million. During the period, the platform successfully served 65,000 concurrent customers, compared to average 23,000, and earlier peak of 48,000 users.

During the quarter, our Retail Equities and Allied Business revenue rose 35% to 292 crore vs 215 crore in Q4FY19. The allied business comprises lending towards ESOP & MTF, and Prime subscription fees. Employee Stock Option Plans (ESOP) & Margin Trade Funding (MTF) interest income rose 78% year-on-year to 33 crore in Q4FY20. Prime subscription income grew 44% sequentially to ~ 8 crore in Q4FY20.

The company continues to receive encouraging response to Prime, its annual subscription based plan that provides a package of privilege pricing, exclusive research, and higher eATM (payout within 30 mins of selling stocks) limits per day. Currently there are over 3.1 lakh Prime subscribers.

Institutional equities business revenue during the quarter rose by 13% on-year to 37 crore due to increased traction in block deals.

Distributionrevenue stood at 115 crore in Q4FY20 up 3% against Q4FY19.

I-Sec is India's second largest non-bank MF distributor by revenue with a 4% revenue market share (based on FY19 revenue). It earned 57 crore of revenue through MF distribution during the quarter, vs 59 crore in Q4FY19, down 4%.

With increased focus on other products like home loans, fixed income products, corporate bonds and deposits, insurance, AIF, PMS, SGBs, NPS, etc., non-MF distribution revenue rose 13% in Q4FY20 vs Q4FY19, to 54 crore. During the quarter, I-Sec expanded its fixed income offering by launching distribution of ICICI Bank fixed deposits.

The company has a network of 172 ICICIdirect branches (vs 199 in Q4FY19) and a nationwide network of business partners, consisting of sub-brokers, authorized persons, IFAs & IAs, which grew by 32% to 9,400+.

I-Sec's Private Wealth Management (PWM) business reported 87 crore of revenue in Q4FY20, Vs 57 crore in Q4FY19, up 53%. The PWM business is a home-grown franchise set up to service affluent customers. It serves over 32,000 clients with an asset base of over 83,000 crore.

Our Investment Banking revenue stood at 10 crore in Q4FY20, down 23% on-year, primarily due to lower number of high value deals. I-Sec is ranked second amongst domestic financial advisors by number of deals in Merger Market table. The company has strong IPO pipeline (as per SEBI filling) of 12 deals amounting to over 37,800 crore.

Management Commentary

Mr. Vijay Chandok, Managing Director and Chief Executive Officer, said, "We had an eventful quarter which tested the resiliency of our business model. During these testing times, we ensured safety of our employees and continuity for our customers. Our predominantly digital business model has held us in good stead with 97% of equity and 94% of MF transactions conducted online by the clients themselves. Our platform has proved its mettle by successfully serving unprecedented number of concurrent users with very high trading volumes. Our proactive and real time risk management framework ensured we dealt with market volatility satisfactorily.

"During the quarter, we saw continuing retail participation as a steep correction in such a short period of time provided many with an opportunity to enter the market at multi-year low prices. In the current environment, investors are looking at sound advice, trusted partner, and a reliable platform, and we feel I-Sec scores high on all these.

"As a virtual financial supermarket, our continuing endeavor is to meet all the three need sets of our customers - wealth management and investments, protection of life & assets, and their borrowing needs. We remain focused towards digitizing more and more of our offerings, many of which we will launch alongwith our fintech partners. This is an extremely exciting journey with enormous possibilities going forward.

FY20 Performance

The company reported consolidated revenue of 1,725 crore in FY20, almost flat against 1,727 crore in FY19. Consolidated Profit after tax (PAT) for FY20 was up 10% at 542 crore, Vs 491 crore in FY19, on account of reduction in statutory tax rates.

Return on Equity (RoE) remained robust at ~ 48%.

About ICICI Securities

ICICI Securities Limited (I-Sec) is a subsidiary of ICICI Bank Ltd. The company began its operation in May 1995 and continues to grow its operation through expanding its client base and providing different type of services.

I-Sec operates www.icicidirect.com, India's leading virtual financial supermarket, meeting the three need sets of its clients-investments, protection, and borrowing. Through its three lines of businesses --broking, distribution of financial products, and investment banking-- I-Sec serves customers ranging from the retail and institutional investors to corporates to high net-worth individuals to government.

I-Sec is listed on National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).For details, visit: www.icicisecurities.com

Disclaimer

Except for the historical information contained herein, statements in this release which contain words or phrases such as 'will', 'expected to', etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the actual growth in broking business and other financial services in the countries that we operate or where a material number of our customers reside, our ability to successfully implement our strategy, including our use of the Internet and other technology our exploration of merger and acquisition opportunities, our ability to integrate mergers or acquisitions into our operations and manage the risks associated with such acquisitions to achieve our strategic and financial objectives, our growth and expansion in domestic and overseas markets, technological changes, our ability to market new products, the outcome of any legal, tax or regulatory proceedings in India and in other jurisdictions we are or become a party to, the future impact of new accounting standards, our ability to implement our dividend policy, the impact of changes in insurance regulations and other regulatory changes in India and other jurisdictions on us. ICICI Securities Limited undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.

For further details, contact:

ICICI Securities Ltd.
Rabin Ghosh
rabin.ghosh@icicisecurities.com
+91 9820530306
Adfactors PR Ltd.
Rasika Badshah
rasika.badshah@adfactorspr.com
+91 9821631379