ICICI Securities reported 26.1% fall in consolidated net profit to Rs 380.35 crore on a 6.7% fall in total revenue from operations to Rs 941.64 crore in Q3 FY23 over Q3 FY22.
The Retail Equities and Allied Business which includes lending towards MTF (margin trade funding) & ESOP (employee stock option plans), Prime & NEO subscription fees, reported revenues at Rs 504 crore, down 4% YoY. This was due to decline in cash volumes in the market.
The Distribution Business reported revenues of Rs 167 crore in Q3 FY23, up 2% YoY on the back of growth in Mutual Fund and Life Insurance products.
Institutional Equities revenue during the quarter decreased by 32% YoY to Rs 47 crore, primarily due decline in Cash ADTOs and muted capital markets.
The Issuer Services and Advisory business revenue stood at Rs 48 crore in Q3 FY23, down 56% YoY due to reduction in number of capital market deals. The company has a strong IPO pipeline of amount over Rs 41,100 crore across 21 deals, with 16 deals where the amount is yet to be decided.
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Total expenses increased by 16.3% YoY to Rs 502.55 crore during the quarter, due to higher employee expenses (up 1.6% YoY), higher finance costs (up 85% YoY) and higher other expenses (up 3.3% YoY).
Impairment charge on financial instruments amounted to Rs 1.5 crore in Q3 FY23 as against 0.34 crore in the same period last year.
Profit before tax in Q3 FY23 stood at Rs 377.33 crore, down by 26% from Rs 409.83 crore in Q3 FY22.
ICICI Securities said that the decline in profitability was on account of decline in cash volumes, muted capital market activities, increase in finance cost, and continued investments towards technology and other franchise value enhancing initiatives.
At the end of the quarter, the company saw its total client base expand cross 87 lakh, with approximately 3 lakh added during the quarter.
Total client assets on the platform during the quarter touched Rs 6 lakh crore, out of which Rs 3.2 lakh crore pertains to its 76,000 plus private wealth customers, comprising of HNIs, U-HNIs, and Family Offices.
Vijay Chandok, managing director and CEO of ICICI Securities, said: "As we look back on the past quarter, we are satisfied to see the outcome of our articulated strategy of being a neo financial services company offering a suite of products and services across investments, insurance and loans taking shape.
Given the structural shifts taking place in India like formalization and equitization of savings, entry of 10-15 crore youth in the job market annually and projected healthy GDP growth over next several years leading to overall rise in affluence level, we believe we have a long runway for growth.
We are focused in building a long-term sustainable business and towards this we continue to invest aggressively in building blocks for the future as we cement our position as a complete financial lifecycle partner. Going forward, we expect some of our newer non-equity initiatives like loans, insurance, and wealth management attain significant scale."
ICICI Securities (I-Sec) is a subsidiary of ICICI Bank. Through its four lines of businesses -- broking, distribution of financial products, wealth management and investment banking-- I-Sec serves customers ranging from the retail and institutional investors to corporates to high net-worth individuals to government.
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