ICICI Securities' Q3FY19 consolidated net profit declines 24.6% qoq to Rs101cr : Misses Estimates

The company’s consolidated total income stood at Rs405cr, down 18% yoy and 11.6% qoq.

Jan 14, 2019 10:01 IST India Infoline Research Team

ICICI Securities Q3FY19

Consolidated Results Q3FY19: (Rs. in cr)

Q3FY19 QoQ (%)
Revenue 405 -11.6
EBITDA 170 -23.3
EBITDA margin (%) 42.11 -639
Net profit 101 -24.6
***EBITDA margin change in bps


ICICI securities Ltd’s revenue declined by 18% yoy and 11.6% qoq to Rs405cr. EBITDA came in at Rs170cr, down 32.2% yoy and 23.3% qoq. EBITDA margin contracted by 879bps yoy and 639bps qoq to 42.11%. Company’s adjusted net profit stood at Rs101cr, down 34.3% yoy and 24.6% qoq. Net profit came below estimate of Rs116cr.

• The company has re-launched its digitized customer acquisition process – T20, under which a customer can be on-boarded in 20 mins and begin trading immediately after that.
• In the Broking segment, company currently has over 43 lakh operational accounts. Restrictions on saving of Aadhaar data impacted the pace of new client acquisition, which affected overall revenue growth.
• Disallowing payment of upfront MF commission to distributor had a significant impact on the company’s distribution business.
• Revenue decline was witnessed across the segments. Broking and commission revenue declined by 16% yoy and 11% qoq to Rs376cr.
• Revenue from Advisory services stood at Rs26cr vs. Rs41cr yoy and Rs28cr qoq.
• Employee benefit expenses stood at 35% of revenue vs. 26.9% yoy and 31.3% qoq leading to contraction of margin.
• Other expenses stood at 14.2% of revenue vs. 12.8% yoy and 12.8% qoq.
• Tax rate for the quarter stood at 36% vs. 34.3% yoy and 35.4% qoq impacting the net profit.
• Company launched a revolutionary new offering ‘eATM orders’ under which retail investors get upto Rs50,000/day from their share sale proceeds transferred to their accounts within 30 minutes of trade (vs. T+2 settlement cycle followed normally) at no extra cost.
• In order to tap the potential in tier 2/3 cities, company has launched a mobile app for its business partners (currently 6,500), which will help in better service delivery by them and deepen their client engagement and improve scalability.

Looking at the current market scenerio, we expect the revenue growth to remain subdued in near term. We expect near term weakness in the stock price.


Technical View:

ICICI Securities Ltd is currently trading at Rs. 274.15, down by 5.6 points or 2% from its previous closing of Rs. 279.75 on the BSE.
The scrip opened at Rs. 277 and has touched a high and low of Rs. 283.70 and Rs. 271.95 respectively. So far 2,22,444 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 100 DMA.


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