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Shares of Angel One rose as much as 9 per cent on the BSE during intraday trade on Tuesday after the company reported a healthy 44 per cent year-on-year (y-o-y) rise. of its consolidated profit after tax (PAT) at Rs 423.4 crore in September Quarter (Q2FY25). The stock broking and allied services company’s total revenue grew 8% year-on-year to Rs 1,516 crore during the quarter.
Angle One recorded continued healthy performance driven by strong customer acquisition (around 3 million customers in Q2FY25) and increase in customer financing portfolio (around 25% sequentially). The number of orders increased by 5.8 percent quarter-on-quarter (QoQ), mainly driven by improvement in the liquidity segment.
With a 19.3 percent share in overall retail stock revenue, the company’s management said it continues to report improving market share across all segments.
Angel One share price rose 9 per cent to Rs 2,975 on the BSE in intraday trade today. It was trading higher for the fourth consecutive day, rising 15 percent during the period. The stock had touched a 52-week high of Rs 3,900.35 on January 9, 2024.
Brokerage firm Motilal Oswal Financial Services said Angel One’s gross brokerage revenues stood at Rs 940 crore, up 29 per cent year-on-year (4 per cent below estimates), driven by continued growth in the futures and options (F&O) segment, up 23 percent. percent from the previous year (9 percent below estimates); aside from strong growth in the cash segment, which grew 52 percent year-on-year (16 percent better than estimates); and robust growth momentum in the commodities segment, which grew 93 percent year-on-year (39 percent better than the brokerage firm’s estimates).
Angel One has demonstrated its ability to protect its profitability by taking corrective pricing actions to offset the impact of on-label fee regulations.
Going forward, the impact of new F&O regulations for index options – wherein the number of weekly expiries will be limited to one per exchange and lot sizes will be increased from Rs 15 lakh to Rs 20 lakh, as well as other measures – should have volumes of impact for companies operating in the sector.
Angel One will decide on its pricing measures to offset the impact of these measures after implementation. Nevertheless, the company claimed that in the long term, margins would be reduced to 45-50 percent. Besides, new businesses such as loan distribution, fixed deposits, wealth management and asset management company (AMC) are expected to gain traction in the medium term, Motilal Oswal Financial Services (MOFSL) said in updating the company’s results.
Meanwhile, MOFSL shares hit an all-time high of Rs 873.40 as they surged 6 per cent against the BSE in today’s intraday trade. Over the past six trading days, the stock has soared 24 percent.
Last month, India Ratings and Research Private (India Ratings) had revised the credit rating outlook of MOFSL’s debt instrument(s) from ‘stable’ to ‘positive’.
The rating agency cited positive outlook factors such as an increase in the group’s overall revenues and profits across different segments, apart from an experienced management team, a significant investment portfolio, market share gains in all businesses, strong revenue per client in the brokerage industry. compared to its peers, as well as a major capital markets lending business and real estate subsidiary, as reasons for the rating upgrade.
With increasing retail participation within discount brokers over the past three years, there could be a gradual migration of clients to full-service providers, benefiting the MOFSL Group due to changing regulations for discount brokers.
Given the volatility of financial market activities, such as private wealth, asset management and wealth management, the volume of MOFSL may experience some moderation.
However, the benefits of expanded participation in equity markets are expected to accrue on a recurring basis and the benefits of operating leverage of an established franchise would continue to flow through to MOFSL, India Ratings had said while announcing the review increasing its rating.
Meanwhile, JM Financial hit a 52-week high of Rs 164.95 and rebounded 6 per cent on the BSE in intraday trade. IIFL Securities climbed 5 percent to Rs 419.05, followed by 360 One WAM (up 5 percent to Rs 1,120), Aditya Birla Money (up 4 percent to Rs 162.20) and Emkay Global Financial Services (up 2 percent to Rs 249.40). ).
In comparison, the BSE Sensex was down 0.03 per cent at 81,947, at 9:51 am.
First publication: October 15, 2024 | 10:52 a.m. STI