Angel One Shares Surge 11 Percent On Strong Q2 Results And Profit Growth

Shares of Angel One Ltd jumped by 11% in Tuesday’s trading session, driven by better-than-expected financial performance in the September quarter.

The stock soared to Rs 3,011.65, cutting its year-to-date losses to 17%. Strong operational efficiency and solid growth in key segments contributed to the company’s profit beat, boosting investor confidence.

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Company Performance

Angel One reported an impressive 39.14% year-on-year (YoY) increase in profit, reaching Rs 423 crore for the September quarter, outperforming estimates by 5%.

The company’s gross broking business also saw a robust 29% YoY growth, fueled by a 23% rise in the futures and options (F&O) segment and a notable 52% growth in the cash segment.

The net interest income for Angel One stood at Rs 2.8 billion, marking an 83% YoY growth, which was in line with market expectations.

Additionally, the company’s average client funding book increased significantly, reaching Rs 3,890 crore compared to Rs 1,410 crore in the same quarter last year.

Other income also rose by 57%, reflecting the company’s overall strong financial performance.

Market Trends

Angel One’s strong performance comes amid a backdrop of new regulatory changes in the stock market, particularly for the F&O segment.

The introduction of new regulations, which include limiting the number of weekly index option expiries to one per exchange and increasing lot sizes to Rs 15-20 lakh, is expected to have an impact on trading volumes.

Despite these regulatory challenges, Angel One has demonstrated resilience by adjusting its pricing strategies.

This has allowed the company to protect its profitability and continue delivering solid financial results.

The broader market environment has also seen a renewed focus on brokerage firms as investors seek stable returns amid evolving market dynamics.

Expert Insights

Motilal Oswal Financial Services Limited (MOFSL) analysts have retained their ‘Buy’ rating on Angel One, citing the company’s ability to navigate regulatory changes and maintain profitability.

They highlighted that Angel One’s strategic pricing actions helped offset the effects of “true to label” charges, ensuring the company remained competitive despite the regulatory environment.

The impact of the new F&O regulations on volumes is yet to be fully realized, but Angel One has indicated that it will review its pricing strategy once the changes are implemented.

The company remains optimistic about its long-term profitability, with margins expected to recover to the 45-50% range.

Furthermore, Angel One’s expansion into new businesses, including loan distribution, wealth management, fixed deposits, and asset management, is expected to drive future growth.

Conclusion

Angel One’s strong Q2 results and effective strategies in managing regulatory changes have contributed to the stock’s 11% surge.

With solid profit growth, a diversified business model, and plans to mitigate the impact of new regulations, Angel One is well-positioned for future growth.

Investors will be closely watching how the company adapts to upcoming regulatory changes and the performance of its new business ventures in the coming quarters.