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22 Jul 2020

I-Sec Q1FY21 performance

Q1FY21 Performance Highlights

  • Revenue at 546 crore, up 36% YoY
  • PAT at 193 crore, up 70% YoY; Cost to income ratio at 53%, down 300 bps YoY
  • Equities and allied revenue at 389 crore, up 62% YoY
  • 1.5+ million active clients
  • Equity market share up 260 bps YoY to 10.7%; Derivative market share up 150 bps YoY to 8.9%
  • Private Wealth Management revenue up 36% to 77 crore YoY
  • Issuer Services & Advisory* revenue up 34% YoY

* Our investment banking business

Mumbai, Wednesday July 22nd, 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 bank, today announced the financial results for the April – June 2020 quarter (Q1 FY21).

Q1FY21 Performance

The company reported consolidated revenue of 546 crore in Q1FY21, against 402 crore in Q1FY20, up 36%, aided by strong growth in equities & allied business. Consolidated Profit After Tax (PAT) for Q1FY21 stood at 193 crore, Vs 114 crore in Q1FY20, up 70%, on account of growth in revenue, improvement in margins, and changes in statutory tax rates.

Business Highlights

I-Sec has a client base of 4.9 million, of which about over 80,000 were added during the quarter. I-Sec has moved to completely digital account opening process from mid-April and the run rate for new account opening has been steadily increasing with the June 2020 numbers being higher than June 2019 numbers.

The company has over 1.5 million active clients (those having traded in the last 12 months) and over 1.1 million NSE active clients (those having traded on the NSE in the last 12 months), up 15% and 27% YoY respectively.

In Q1FY2021, I-Sec expanded its equity market share by 260 bps YoY to 10.7%, with its equity ADTO (average daily turnover) increasing by 115% vs 62% for the market. Similarly, its derivatives market share went up 150 bps YoY to 8.9%, and I-Sec derivative ADTO rose 32% vs 9% for the market. During the quarter, I-Sec made available the third party derivatives strategy platform Sensibull on icicidirect.

During the quarter, our Equities and Allied Business, which comprises of retail equity, institutional equity, lending towards ESOP (Employee Stock Option Plans) & MTF (Margin Trade Funding), and Prime subscription fees, rose 62% on-year to 389 crore. The Retail Equities and Allied Business revenue rose 70% to 354 crore vs 209 crore in Q1FY20. ESOP & MTF interest income rose 32% year-on-year to 23 crore in Q1FY21 and the lending book size stood at 1,500 crore as on 30th June 2020, against ~ 580 crore on 31st March 2020. Prime subscription income grew 31% sequentially to over 10 crore during the same period.

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 3.75 lakh Prime subscribers.

Institutional equities revenue during the quarter rose by 14% on-year to 35 crore due to increased traction in block deals.

Distribution revenue stood at 80 crore in Q1FY21 down 19% against Q1FY20.

I-Sec is India’s second largest non-bank MF distributor by revenue and assets with a 4.5% revenue market share (based on FY20 revenue). It earned 49 crore of revenue through MF distribution during the quarter, down 12% from the year ago period. The quarter saw weakness in the overall MF industry with redemption pressures persisting in debt funds. I-Sec however improved its net flows and market share in equity funds.

Income from distribution of non-MF products like loans, fixed income products, corporate bonds and deposits, insurance, bank FDs, AIF, PMS, SGBs, NPS, etc., were also impacted during the quarter as a significant portion of these business are contract based and the COVID-19 induced lockdown effected closure of their sales. Non-MF revenue declined 25% in Q1FY21 to 29 crore.

The company has a network of 171 ICICIdirect branches (vs 192 in Q1FY20) and a nationwide network of business partners, consisting of sub-brokers, authorized persons, IFAs & IAs, which grew by 62% to 12,100+. New customer acquisition through the business partner during the quarter rose 266% year-on-year.

I-Sec’s Private Wealth Management (PWM) business reported 77 crore of revenue in Q1FY21 up 36% on-year. The PWM business is a home-grown franchise set up to service affluent customers. It serves ~34,000 clients, of which ~1,600 were added during the quarter, with an asset base of ~ 1 L crore, up 20% sequentially.

Our Issuer Services and Advisory business, (Investment Banking) revenue stood at 22 crore in Q1FY21, up 34% on-year. The company has strong IPO pipeline (as per SEBI filling) of 13 deals amounting to over 38,200 crore.

Management Commentary

Mr. Vijay Chandok, Managing Director and Chief Executive Officer, said, “We had an eventful quarter in which we saw increased market participation by all players –retail, HNIs and institutional, resulting in strong growth in our core equities, as well as wealth and investment banking business. Our distribution business was however soft as sentiments remained weak in debt funds and SIP inflows slowed down with investors preferring to conserve cash during these uncertain times.

The quarter tested the resilient nature of our business model. We remain committed to transform ourselves into a financial supermarket of choice for our customers to meet their life stage needs, delivering financial products and solutions digitally. In the context of current pandemic, our stated strategy is all the more relevant with a special focus to increase digitisation, lower cost, enhance investment in technology, and fortifying our talent pool. Our business model is characterized by low credit risk and negligible inventory or supply chain risk. In the current environment, investors are looking at sound advice, trusted partner, and a reliable platform, and I-Sec scores high on all these. We will soon be adding the option of investing in US securities on icicidirect. “

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