Analysts bullish on ICICI Securities share price post Q4 results; CLSA, others see over 50% rally

Changes in ICICI Securities product and sourcing strategy have yielded results over the past year. Image: Reuters

Most of the analysts and brokerage firms are bullish on ICICI Securities stock post Q4 results. ICICI Securities’ consolidated profit jumped 111 per cent to Rs 329 crore on account of growth in revenue and improvement in margins. The company also informed that it has added 3.5 lakh clients in the March quarter, the highest ever addition in a quarter. Brokerage firms such as CLSA, Motilal Oswal Financial Services, HDFC Securities Institutional Equities and others have a ‘buy’ call and expect at least 53 per cent rally in the ICICI Securities stock price.

With normalisation of capital market activity in FY22, analysts at CLSA expect earnings to normalise in FY22/23CL (5-10 per cent drop over FY21). It has retained its buy rating and upgraded the target price to Rs 575, which is 35 per cent rally from the last close, from Rs 540 previously. ICICI Securities informed that its board has declared a final dividend of Rs 13.5 per share, amounting to Rs 21.5 per share for FY21. The company gained 3.5 lakh new customers, the majority of which were via digital sourcing and the ICICI Bank channel. Further, the activation ratio inched up to 84 per cent in the fourth quarter of FY21 versus 60-70 per cent over the past three quarters.

Changes in ICICI Securities product and sourcing strategy have yielded results over the past year. The ‘NEO’ plan has helped counter competition from discount brokers as well as some traditional brokers who offer discount plans, said analysts at Motilal Oswal Financial Services. The brokerage firm sees a 53 per cent rally in the stock and has pegged a target of Rs 650 apiece, with a ‘buy’ rating to it.

Those at HDFC Securities Institutional Equities have maintained an ‘add’ rating to the ICICI Securities share price. It will take ICICI Securities share price to jump over 23 per cent hit the target price of Rs 560 apiece pegged by the brokerage firm. While FY21 has been a year of volatile markets, analysts believe volumes would moderate in FY22E, particularly in the derivatives segment.

The management of ICICI Securities said that the strong results were a testimony of successful implementation of the strategic vision they had articulated earlier and favorable market conditions.