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28 Oct 2020

Q2FY21 Performance Highlights

  • Revenue at 680 crore, up 63% YoY
  • PAT at 278 crore, up 106% YoY; Cost to income ratio at 45%, down 11 percentage points YoY
  • Return on Equity stood at robust 76%, vs 48% in Q2FY20
  • Equities and allied revenue at 450 crore, up 88% YoY; highest ever
  • 1.56 million active clients, up 17% YoY; highest ever
  • Equity market share up 240 bps YoY to 11.1%; Derivative market share up 150 bps YoY to 8.8%
  • Private Wealth Management revenue up 86% YoY to 101 crore; AUM at 1.15L crore#,up 15% YoY
  • Total client asset at 2.9L crore#
  • Issuer Services & Advisory* revenue up 93% YoY to 62 crore
  • Interim dividend of 8 / share announced, vs 4.25 in Q2FY20

* Our investment banking business

# Assets of our clients incl. equity demat assets maintained with ICICI Bank and excluding promoter holding

Mumbai, Wednesday Oct 28, 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 quarter ending 30th September 2020 quarter (Q2 FY21).

Q2FY21 Performance

The company reported consolidated revenue of 680 crore in Q2FY21, against 418 crore in Q2FY20, up 63%, aided by strong growth in equities & allied business, private wealth management business, as well as investment banking business.

Consolidated Profit After Tax (PAT) for Q2FY21 stood at 278 crore, Vs 135 crore in Q2FY20, up 106%, on account of growth in revenue and improvement in margins.

Cost to income ratio stood at 45% in Q2FY21, against 56% in Q2FY20. Return on Equity during the period was at robust 76%, vs 48% in Q2FY20.

The company announced an interim dividend of 8 per equity share (face value 5). It was 4.25 per share in Q2FY20.

Business Highlights

I-Sec has a client base of ~5 million, of which over 113,000 were added during the quarter, the most in last 6 quarters.

The company has over 1.56 million active clients (those having traded in the last 12 months) and over 1.20 million NSE active clients (those having traded on the NSE in the last 12 months), up 17% and 32% YoY respectively. In Q2FY2021, I-Sec expanded its equity market share by 240 bps YoY to 11.1% and derivatives market share by 150 bps YoY to 8.8%.

Total client assets stood at 2.9L crore#.

During the quarter, I-Sec launched commodity trading, allowing customers to diversify their portfolio. I-Sec also launched global investments by enabling domestic investors to seamlessly trade in US markets across stocks, ETFs, and fixed income products. With no minimum ticket size and fractional ownership of shares permitted, even small retail investors can build a portfolio effectively.

In Q2 FY21, 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 88% on-year to 450 crore. The Retail Equities and Allied Business reported highest ever quarterly revenues at 411 crore, up 98% vs 207 crore in Q2FY20. ESOP & MTF interest income rose 124% year-on-year to 45 crore in Q2FY21 and the lending book size stood at ~ 1,870 crore as on 30th September 2020, against ~ 680 crore last year. Prime subscription income grew 221% YoY to 13 crore.

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 4.25 lakh Prime subscribers.

Institutional equities revenue during the quarter increased by 18% on-year to 39 crore.

Distribution revenue stood at 99 crore in Q2FY21 down 7% against Q2FY20.

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 AMFI data). In spite of the mutual funds industry witnessing a decline of 29% YoY in gross equity flows along with net outflows in the equity segment, I-Sec MF revenues grew by 3% YoY to 57 crore.

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 impacted during the quarter as a significant portion of these business are contract based and the ongoing COVID-19 related environment has effected closure of their sales. Non-MF revenue declined 13% YoY in Q2FY21 to 38 crore. However, with business environment rapidly improving, sequentially there is a strong bounce back with non-MF distribution revenue up 32%, and within it, life insurance revenue is up 99%.

The company has a network of 156 ICICIdirect branches (vs 187 in Q2FY20) and a nationwide network of business partners, consisting of sub-brokers, authorized persons, IFAs & IAs, which grew by 70% YoY to 13,600+. New customer acquisition through the business partner network during the quarter rose 251% year-on-year.

I-Sec's Private Wealth Management (PWM) business reported 101 crore of revenue in Q2FY21 up 86% on-year. The PWM business is a home-grown franchise set up to service affluent customers. It serves over 36,000 clients, with an asset base of 1.15 L crore#, up 15% year-on-year.

I-Sec's proprietary Portfolio Management Scheme (PMS) AUM stood at ~ 155 crore as on 30th September 2020, against ~ 45 crore same period last year.

Our Issuer Services and Advisory business (Investment Banking) revenue stood at 62 crore in Q2FY21, up 93% on-year. I-Sec executed 24 investment banking deals during the quarter, against 11 in the corresponding quarter last year. I-sec is ranked #1 in IPO/ FPO/ InvIT/ ReIT issuance with a 98% market share, and #2 in Merger Market league table (amongst domestic financial advisors) for H1 FY21. The company has strong IPO pipeline (as per SEBI filling) of 7 deals amounting to over 8,500 crore.

Management Commentary

Mr. Vijay Chandok, Managing Director and Chief Executive Officer, said,"We are happy to report strong financial and operational performance during the quarter. Most of our businesses have performed well, with the equity and allied business leading the way. We also witnessed recovery in other segments as business sentiment is improving with economic activities picking up.

"Our customer acquisition engine has picked up pace and we added a record number of new clients during the quarter, led by our fully digital on-boarding process, open architecture model, and improved activation and penetration by the ICICI Bank and business partner network.

"Our distribution business is turning around and we delivered a growth in our MF distribution business after seven quarters and I am confident that going forward all parts of our distribution business will contribute positively.

"We are committed to remain the digital financial supermarket of choice for our customers by meeting all their financial lifecycle needs in investments, protection, and borrowing. We are laying the foundations for a strong and future-ready business and towards this we remain focused on key areas of strategy with special attention to investment in technology, digitisation of products and processes, cost, and fortifying our talent pool."

# Assets of our clients incl. equity demat assets maintained with ICICI Bank and excluding promoter holding

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 four lines of businesses -- broking, distribution of financial products, wealth management 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