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This broking stock delivered 178% returns in four months; CLSA upgrades target price by 39%

This broking stock delivered 178% returns in four months; CLSA upgrades target price by 39%

This broking stock delivered 178% returns in four months; CLSA upgrades target price by 39%
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By Mousumi Paul  Jul 24, 2020 6:23:04 AM IST (Updated)

ICICI Securities gave a 178 percent whopping returns to its investors within just four months. The stock is now trading near its all-time high levels of Rs 568 on the back of positive investors sentiment and strong growth. 

One of the India's largest broking firms came up with stellar June quarter earnings by completely offsetting the pandemic effect. The firm reported a stunning growth because retail investors had invested money in stocks.

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ICICI Securities has also delivered handsome returns to its shareholders in the past four months. The stock gave whopping 178 percent returns to its investors within just four months.
The stock is now trading near its all-time high of Rs 568 on the back of positive investor sentiment and strong growth.
In its quarter ended June 30, 2020, the broking firm reported a 70 percent jump in the net profit at Rs 193 crore, led by strong revenues and margin improvement.
The revenues surged 36 percent year-on-year (YoY) to Rs 546 crore in April-June 2020-21, as compared to Rs 402 crore during the same period last financial year.
During the quarter, equities and allied business rallied by 62 percent to Rs 389 crore. MD & CEO Vijay Chandok said, "We had an eventful quarter in which we saw increased market participation by all players –retail, HNIs and institutional, resulting in strong growth in our core equities, as well as wealth and investment banking business."
He also added that the company's distribution business was however soft as sentiments remained weak in debt funds and SIP (systematic investment plan) inflows slowed down with investors preferring to conserve cash during these uncertain times.
CLSA, in its report, gave a big target price upside over its strong core retail equity broking business performance. According to the brokerage, lower equity prices, paperless e-KYC leading to faster customer onboarding, a higher proportion of equity volumes vs derivatives and new open architecture likely drove buoyant Q1 core performance.
"We raise FY21CL EPS estimates 18 percent to factor in strong Q1FY21 earnings but expect revenue growth to normalise as the buoyant retail equity participation that drove Q1 performance subsides. We increase FY2022 estimates by a modest 3 percent," added the brokerage.
Hence, CLSA maintains BUY rating on the stock with target price raised from Rs 450 to Rs 625 based on 24x Jun-22CL P/E.
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