Q4FY21 Result Update - 5paisa Capital - ICICI Direct

5Paisa reported a mixed set of Q4FY21 numbers wherein the broking segment showed healthy momentum while non-broking business performance remained flat. Revenue remained sequentially flat at Rs. 49.5 crore, on account of 23% and 4% QoQ fall in allied broking and cross sales income, respectively. Allied broking income declined due to a reduction in annual maintenance charges to nil from Rs. 45/month earlier for holdings up to Rs. 2 lakh while for customer holdings above Rs. 2 lakh will be charged Rs. 25/month. Broking revenue growth, on the other hand, was healthy at 18% QoQ to Rs. 23.2 crore due to strong sequential customer addition of 2 lakh and 16% QoQ rise in overall ADTO. Cash ADTO increased 9% QoQ to Rs. 2008 crore while ADTO in the derivative segment has increased 16% QoQ to Rs. 49965 crore.

Valuation & Outlook

Recent capital raising would aid the company's plan to revamp existing products suite, increase pace of customer acquisition and improve share of non-broking business like P2P lending, distribution of financial products. However, utilisation & benefit of recent capital addition, impact of regulatory changes, level of customer burnout/leakage need to be monitored. 5Paisa being one of the strong cash players within discount brokers, decline in F&O share did not impact revenue much. However, we believe a focussed approach to raise F&O market share and capital to increase the margin funding book, should aid earnings. We expect earnings to rise at 79% CAGR in FY21-23E to Rs. 55 crore. However, recent capital raise would keep return ratios optically lower at ~12%. We maintain BUY rating on the stock and upgrade our target price to Rs. 450 (earlier TP Rs. 350) valuing at 25x FY23E EPS.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_5Paisa_Q4FY21.pdf

Shares of 5paisa Capital Ltd was last trading in BSE at Rs.371.5 as compared to the previous close of Rs. 380.3. The total number of shares traded during the day was 13567 in over 506 trades.

The stock hit an intraday high of Rs. 390 and intraday low of 365.3. The net turnover during the day was Rs. 5083423.

Source : Equity Bulls

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