Buy ICICI Securities, target price Rs 650: Motilal Oswal

Buy ICICI Securities, target price Rs 650:  Motilal Oswal

Motilal Oswal has buy call on ICICI Securities with a target price of Rs 650. The current market price of ICICI Securities Ltd. is Rs 426.5.

ICICI Securities Ltd., incorporated in the year 1995, is a Mid Cap company (having a market cap of Rs 14362.58 Crore) operating in Financial Services sector.

For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 620.11 Crore, down 8.90 % from last quarter Sales of Rs 680.68 Crore and up 46.86 % from last year same quarter Sales of Rs 422.24 Crore. Company reported net profit after tax of Rs 267.02 Crore in latest quarter.

Investment Rationale
Changes in ISEC’s product and sourcing strategies have yielded results over the past 1.5–2 years. Given intense competition in the sector, this is likely to continue in the foreseeable future. ISEC recently launched its ‘NEO’ plan to counter competition from discount brokers as well as some traditional brokers with discount plans. Also, its open architecture sourcing has seen fair success. On the other hand, the Distribution business remains on a moderate growth trajectory. ISEC’s path to profitability improvement is attributable to its costcutting initiatives, which it has been executing very well. It upgrade EPS estimates for FY22/FY23E by 8–9%.

Promoter/FII Holdings
Promoters held 75 per cent stake in the company as of Dec 30, 2020, while FIIs held 4.6 per cent, DIIs 9.9 per cent and public and others 10.5 per cent.

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