Angel One stock goes up another 5% after Q2 earnings

After rallying over 18% the previous day, shares of Angel One surged 5.3% to Rs 3,394 in Wednesday's trade on BSE after the company on Tuesday reported its best-ever quarterly performance across key financial metrics in the three month period ended September 30, 2024.

The domestic brokerage on Monday reported a consolidated net profit at Rs 423 crore in Q2FY25, which was up 39% from Rs 304 crore reported by the company in the year ago period. The total revenue from operations in the reported quarter stood at Rs 1,515 crore which was up 44.5% over Rs 1,048 crore reported by the company in the corresponding quarter.

Additionally, Angel One added 30 lakh clients in Q2FY25, representing a 15.9% quarter-on-quarter growth, bringing its overall client base to 27.5 million, which is an 11.2% increase on a quarter-on-quarter basis.

The overall Average Daily Turnover (ADTO) on a notional basis stood at Rs 45.4 lakh crore in Q2FY25, compared to Rs 43.8 trillion in Q1FY25, reflecting a 3.7% growth quarter-on-quarter.

Following the Q2 performance, ICICI Securities maintained its 'Buy' rating on Angel One and revised its target price to Rs 3,700, up from Rs 2,800.

"We increase our valuation multiple to 20x (previously 15x) for Angel, based on its strong business execution, as evidenced by its share in cash volumes (17.5%), share in F&O volumes (20.7%), share in active NSE clients (15.5%), and robust growth in MTF book (48.1% QoQ average MTF book growth in Q2FY25). The prospects for new business segments like AMC, wealth management, insurance distribution, and credit distribution also look promising," ICICI Securities stated.

"Despite possible regulatory challenges concerning option volumes, we remain optimistic about earnings growth opportunities, coupled with the prospect of higher investor returns, given the current valuation (17x FY26E EPS)," the firm added.

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Similarly, brokerage firm Motilal Oswal maintained its 'Buy' rating on Angel One and raised its target price to Rs 4,100.

“We now factor in a 6%/10% QoQ decline in F&O orders in 3QFY25/4QFY25. We also assume a price hike of Rs 3/order in 1QFY26. As a result, we cut our EPS estimates by 9%/12% for FY25/FY26. Upsides could come from revenues from new segments, which we are yet to factor in," Motilal said while setting the target price at Rs 4,100.

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