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Axis Securities Report
Key Takeaways
Focus on improving derivatives market share
ICICI Securities Ltd. believes that key factors that will enable it to improve its market share rapidly in the derivative segment are:
Number of customers,
volumes and
revenue.
The company has been closely monitoring its performance on these parameters and has seen healthy YoY growth. However, it has also identified hindrances which have slowed its pace of market share improvement in the derivative segment. These are:
absence of intensive marketing efforts and
performance of the app.
The company is consistently working on fixing these issues. Thus, with concentrated efforts towards improving the product offering and proposition, the management expects ICICI Securities to witness a meaningful improvement in the derivatives market share in the coming quarters.
Changing proposition in the Investment banking business
ICICI Securities has been able to strengthen its leadership position in the investment banking business primarily led by-
strengthening research capabilities,
sharpening sectoral coverage (with a dominant presence in the banking, financial services and insurance and infra/Infrastructure investment trusts-real estate investment trusts),
strengthening the tech stack and
deepening client relationship beyond IPOs given the monetisation capability.
The management believes that this has helped it even out the ‘episodic'-nature of the business.
Outlook
We believe the company's efforts to reduce dependence on the cyclical broking business and diversify revenue streams should lend some stability to overall revenue growth.
ICICI Securities' continued investments towards technology and franchise-building will keep cost ratios inflated. However, this would ensure scalable growth over the long term.
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