Buy ICICI Securities; target of Rs 915: Motilal Oswal

Motilal Oswal's research report on

1QFY22 was another robust quarter for ISEC, following an overall strong FY21. PAT was up 58% YoY to INR3.04b (33% beat), driven by 36% growth in revenue (18% beat). C/I ratio inched up ~430bp sequentially to 45%, led by a 42% rise in employee costs. In our view, variable expenses were front loaded during 1QFY22. Employee cost-to-total income stood ~20% v/s ~23% in FY21 and 29-32% over FY18-20. Strong momentum in the capital market, coupled with a healthy deal pipeline in Investment Banking, has led us to raise our FY22E/FY23E EPS estimate by ~19%/25%. Operating leverage remains huge in this business. We maintain our Buy rating with a TP of INR915/share (21x FY23E EPS).

Outlook

We raise our FY22E/FY23E EPS estimate by ~19%/ 25% to factor in strong revenue traction across the board. We maintain our Buy rating with a TP of INR915 per share (21x FY23E EPS).

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