Why ICICI Securities Share Price is Falling

ICICI Securities is among India's largest broking firms. It offers many investment services.

But what's happening with the share price of this investment advisory company might surprise you.

ICICI Securities share price has moved like a swing. In 2021, the company's share price went up to touch the sky and gained 70%. In 2022 however, the share price has come down as if there's no tomorrow.

It's down around 46% 2022 so far. In fact, yesterday, shares of ICICI Securities hit their 52-week low of Rs 408.4.

But what has caused this sharp fall this year?

Read on to find out...

Market Correction

In 2021, almost all stocks saw a tremendous rise. Due to the pandemic restriction and lack of investment opportunities in businesses, retail investors' money was flowing into the share market.

However, in 2022, lockdown restrictions were lifted and the money started flowing outside the stock markets. There were other factors too on why the stock markets fell... FII selling, geopolitical tensions, inflation concerns, among others.

The share market started bleeding red in 2022 and ICICI Securities has seen a similar fate.

Disappointing financial performance

For 2021-22, ICICI Securities reported a total income of Rs 34,369 m. This was 33% higher compared to the previous year's income.

While the yearly revenues seem encouraging, the quarterly revenues don't.

The total income for the quarter ending March 2022 is Rs 9,418.1 m. Hence, there has been a fall of 5% in total income compared to the preceding quarter.

There has been an increase in expenses too. Total expenses for 2021-22 were Rs 15,871.2 m. This is 37% higher compared to last year. The quarterly expenses have also gone up by 1%.

Thus, the rise in income is negated by the rise in expenses. As a result, profit for 2021-22 was Rs 13,795.4 m, which was 29% higher compared to last year.

In March 2022 quarter the profit rose by 3% over last year. The growth rate was lower than market expectations.

Hence, investors were left disappointed.

To know more, check out ICICI Securities' latest quarterly results.

Business Impact

ICICI Securities is engaged in the business of broking (institutional and retail), distribution of financial products, merchant banking, and advisory services.

From the financial performance of the company it is clear that the business has taken a hit. During volatile periods, investors wait on the side-lines and broking companies get affected.

This is exactly what Zerodha CEO Nithin Kamath said when the company declared results:

• 'In almost every bull market, it looks like the broking industry can grow forever, but it cannot. There are significant risks.
  
  If the markets take a turn for the worse, the user growth drops, leading to a reduction in active traders & hence revenue.
  
  And brokerage firms can do nothing; it is like being a sitting duck'.

It should be noted that while the number of clients might have reduced, the market share of ICICI Securities is intact.

The share price of ICICI Securities is currently facing the heated market scenario but it has sound fundamentals and bright growth aspects.

Hence, short-term or medium-term investment gains may not be possible due to changes in the market, but it still might be a good choice for long-term investment.

To know more about the company, check out ICICI Securities' financial factsheet.

About ICICI Securities

ICICI Securities is engaged in the business of broking (institutional and retail), distribution of financial products, merchant banking and advisory services.

It's a subsidiary of ICICI Bank, and the broking arm of the ICICI Group. The company also offers wealth management services and distributes financial products.

You can compare ICICI Securities with its peers on our website.

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