ISEC - ICICI Securities

📊 NSE: ISEC 🏢 Finance & Investments 📅 Last Updated: 12/14/2025 7:52

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 75.9% YoY to INR 1,644.11 Cr in Q1 FY2025. Segment growth: Brokerage income grew 81.5% to INR 622.29 Cr, Interest income grew 89.3% to INR 582.59 Cr, and Income from services grew 64.8% to INR 414.75 Cr. Issuer Services & Advisory revenue surged 251% YoY due to increased deal activity.

Geographic Revenue Split

Not specifically disclosed in percentage terms, though the company operates in domestic Indian markets and maintains presence in overseas jurisdictions to serve NRI clients and foreign institutional investors.

Profitability Margins

Profit After Tax (PAT) margin for Q1 FY2025 stood at 32.05%, improving from 28.98% in Q1 FY2024. The company maintains a healthy 5-year average Return on Net Worth (RoNW) of 53.9%. Return on Equity (RoE) was reported at 50% for FY2024.

EBITDA Margin

Profit Before Tax (PBT) margin was 43.03% in Q1 FY2025, up from 38.99% in Q1 FY2024. Core profitability is driven by the scale-up of the high-margin Margin Trade Funding (MTF) book and operating leverage in the retail broking business.

Capital Expenditure

Not disclosed as a specific absolute INR figure, but focus remains on technology infrastructure and digital platform enhancements to support the 3-in-1 account model.

Credit Rating & Borrowing

Maintains 'Stable' outlook from CRISIL and ICRA. Finance costs increased 113.3% YoY to INR 393.84 Cr in Q1 FY2025, driven by a sharp rise in borrowings to INR 23,800 Cr (as of August 2025) to fund the expanding MTF book.

⚙️ Operational Drivers

Raw Materials

As a financial services firm, primary 'input costs' are Finance Costs (representing 42% of total expenses) and Employee Benefit Expenses (representing 28% of total expenses).

Import Sources

Not applicable for financial services; however, the company sources capital from domestic debt markets, primarily through Commercial Paper (CP) and is expanding into Non-Convertible Debentures (NCDs).

Key Suppliers

Primary capital providers include ICICI Bank (parent support) and various institutional investors in the commercial paper market.

Capacity Expansion

The Margin Trading Facility (MTF) book, a key capacity metric, grew to INR 15,074 Cr by June 2025, representing a 134% increase from INR 6,419.9 Cr in March 2023. Market share in MTF stood at ~17% as of June 2025.

Raw Material Costs

Finance costs (cost of capital) stood at INR 986.95 Cr for FY2024, representing 19.5% of total revenue, a significant increase from 15.6% in FY2023 due to higher leverage for the MTF business.

Manufacturing Efficiency

Operational efficiency is reflected in the 28% CAGR of PAT from FY2019 to FY2024, achieved while maintaining a dominant position in NSE active clients.

Logistics & Distribution

Distribution costs are primarily 'Fees and commission expenses' which rose 92% YoY to INR 74.21 Cr in Q1 FY2025, tracking the 64.8% growth in service income.

📈 Strategic Growth

Expected Growth Rate

28%

Growth Strategy

Growth is targeted through the 'PLEDGE' value proposition, focusing on wealth management (33% CAGR in wealth assets), scaling the MTF book (17% market share), and diversifying into non-IPO investment banking revenues which grew 251% YoY.

Products & Services

Retail and institutional equity broking, Margin Trade Funding (MTF), Mutual Fund distribution, Investment Banking (IPO mandates and advisory), and Wealth Management services.

Brand Portfolio

ICICIdirect, ICICI Securities, I-Sec.

New Products/Services

Expansion of the '3-in-1' account model and enhanced ESG-based mutual fund offerings to capture the increasing financialization of savings.

Market Expansion

Focus on strengthening the FII franchise through international partnerships and increasing digital onboarding to reach beyond ICICI Bank's existing retail clientele.

Market Share & Ranking

Ranked among the top players in online retail broking; 3rd largest non-bank distributor of mutual funds; ~17% market share in the MTF segment.

Strategic Alliances

Strategic partnership with ICICI Bank for the 3-in-1 account ecosystem, which interlinks bank, demat, and trading accounts.

🌍 External Factors

Industry Trends

The industry is shifting toward 'financialization of savings'. While traditional broking faces pricing pressure, the MTF and wealth management segments are growing rapidly. Regulatory tightening by SEBI (e.g., ASBA for secondary markets) aims to safeguard investor funds but increases compliance burdens.

Competitive Landscape

Intense competition from discount brokers and new entrants leading to pricing pressure; I-Sec competes by offering a full-service suite including research and advisory.

Competitive Moat

The primary moat is the '3-in-1' account integration with ICICI Bank, providing a seamless user experience and a steady pipeline of bank clients, which is difficult for pure-play discount brokers to replicate.

Macro Economic Sensitivity

Highly sensitive to capital market cycles; performance is tied to GDP growth, crude oil prices, and inflation which impact investor sentiment and corporate earnings.

Consumer Behavior

Shift toward digital-first trading and increasing interest in wealth management products among retail investors.

Geopolitical Risks

Geo-political tensions and trade protectionism are cited as threats that could impact foreign investment inflows and Indian economic stability.

⚖️ Regulatory & Governance

Industry Regulations

Subject to SEBI regulations including margin pledge/re-pledge mechanisms, daily client collateral reporting, and 'Qualified Stock Broker' (QSB) enhanced governance requirements.

Environmental Compliance

Investments in green energy for Maharashtra offices and a target to reduce paper consumption by 35% by FY2025 from a FY2019 baseline.

Taxation Policy Impact

Effective tax rate for Q1 FY2025 was approximately 25.5% (INR 180.62 Cr tax on INR 707.53 Cr PBT).

Legal Contingencies

The company monitors outcomes of legal, tax, and regulatory proceedings in India and overseas, though specific pending case values in INR were not disclosed in the provided text.

⚠️ Risk Analysis

Key Uncertainties

Capital market volatility remains the primary risk, as broking revenues (44.2% of NOI) are cyclical. Regulatory changes by SEBI regarding client fund usage and margin collection pose ongoing transition risks.

Geographic Concentration Risk

Primarily concentrated in India, with specific mention of Maharashtra for green energy initiatives; revenue is susceptible to Indian macroeconomic downturns.