ICICI Securities Limited (ISEC) is an integrated and technology-based firm offering a wide range of services including retail and institutional broking, financial products distribution, private wealth management, and advisory services.
ISEC manages total assets of ₹4.2 trillion for clients across different products. Currently, it is the 4th largest broker in terms of NSE active clients and commands a market share of 8.4%. Recommending as its top stock pick for this week, Axis Securities said that ISEC aims to reduce its dependence on the broking business by bringing down its share below 50% of revenues over the medium term.
The company’s transformational journey from a ‘physical’ to a ‘digital’ financial services provider has laid the foundation to build a scalable business model moving forward, it added.
“This re-engineered business model will enable ISEC to gain market share and maintain its formidable position in the intensely competitive landscape. We continue to like ISEC for its superior ROE profile, better brand recall, and innovative product proposition offered across customer segments," Axis note stated.
The brokerage firm has a BUY recommendation on the ICICI Securities stock with a target price of ₹832/share.
“ISEC aims to maintain its steady growth momentum on a sustainable basis and looks to transform itself from being a ‘one-stop-shop’ entity to a digitally integrated financial market place, and thereby achieve a market share of 10+% in new customer acquisition," Axis Securities said.
Along with the digital channels, the open architecture and a favourable shift in the demographics towards the younger population will help ISEC maintain its customer addition momentum. Its customer-centric initiatives such as ‘Prime’, ‘NEO’ etc, which have started yielding results, are improving customer activation and thereby supporting revenues, the note added.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
