ICICI SECURITIES (RESEARCH DONE 8 MONTHS AGO)
HIGHLIGHTs:
· One of the few companies which gave extraordinary results for Q4FY20 when Most of the company’s Revenue and profit declined a lot.
Revenue Grew by 18% and Profit Grew by 28% .
· Company been rated as number 1 Equity Franchise.
· Company is growing extraordinarily in broking business .
Brokerage Revenue in Q4FY20 grew by 26% YoY.
India’s second largest broker with active clients.
Operational accounts CAGR growth in 6 years 12% from 2.5mn to 4.7mn.
· Not only in Broking business company is also ranked among the largest wealth manager in the country with AUM over Rs 830 bn.
· MAJOR TRIGGER is the lost trust in small brokers after the episode of Karvy and India Nivesh which is helping them in two ways
1) Existing clients shifting to big players
2)New Clients are opening accounts in Big names only.
3)Also surge has been seen in opening of new broking accounts
· Company enjoy Trust amoung clients , around 40% of active clients are with company for more than 14 years and 65% of revenue have come from clients who have been with company for more than 5 years.
· FUNDAMENTALS
Ø Profit grew by 60% in 3 years from 339cr to 542cr.
Ø ROCE and ROE one of the best around 48%.
Ø Trading at a PE of 24 ,Growth and business can give a much higher PE.
Ø Company have dividend yield of around 2.5%
Ø Promoter holding around 79% and Institution holding 14.6%.
Ø Interest Coverage ratio stands at 9.7 times.
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