Since May 7, post the January-March quarter (Q4FY20) earnings, the stock has rallied 53 per cent from the level of Rs 361. During the quarter, the company 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.
The board of directors of ICICI Securities
is scheduled to meet on Wednesday, July 22, 2020 to consider the audited financial-results of the Company for Q1FY21.
“While quarterly average market ADTO was down 9 per cent in 1QFY21E, strong cash volume, up 34 per cent quarter on quarter (QoQ), will be key to a strong quarter for ICICI Securities.
We expect broking revenue to go up 11 per cent QoQ and 40 per cent year on year (YoY) in 1QFY21E,” Elara Capital said in Q1FY21 preview.
A slower distribution income as well as deals might pull overall revenue down QoQ, although up 15 per cent YoY. We expect cost to moderate QoQ, down 9 per cent, while up 9 per cent YoY, as steps taken by management will take time to result in lower cost. We expect a 300bp QoQ and YoY expansion in PBT margin to 48 per cent. This coupled with lower taxation would see earnings rise by 42 per cent YoY, it said.
“ICICI Securities has maintained profitability despite revenue pressure in the recent past through several cost-cutting measures (reduction in branches/headcount, renegotiation of arrangements, etc.). These cost-cutting measures are likely to continue over the near-to-medium term and should result in around 400bp reduction in C/I ratio over FY20-23E, in our view”, Motilal Oswal Securities had said in its initial coverage report in May. The stock however, is already trading above the brokerage firm's 12-month target price of Rs 460 per share.