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Motilal Oswal
ICICI Sec (Buy)
Target: ₹625
CMP: ₹455.50
In FY21, ICICI Securities witnessed lower incremental market share in client acquisition compared to prior years. The sudden lockdown caused by the Covid-19 outbreak impacted customer acquisition, where discount brokers were better placed. ISEC has corrected this now with a digital end-to-end customer acquisition process.
The management is focusing on: a) open architecture, b) tie-up with newer banks similar to its arrangement with ICICIBC, c) increasing sub-brokers and IFA network, and d) faster processing of digital leads. It is confident of regaining market share in incremental customer acquisition. ISEC is a classic play on increasing financialisation of savings and retail participation in the equity market. Its business and profitability is cyclical. Initiatives such as the tie-up with ICICIBC, Prime, and Options 20 have yielded results.
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