Shares of Angel One ended at ₹1,626.50, down 1.38% on the BSE in Tuesday's trade despite the company posting strong second-quarter earnings. On Friday, Angel one reported a 59% jump in its consolidated net profit at ₹213.6 crore in the September ending quarter. The company reported a net profit of ₹134.2 crore in the same quarter of the previous fiscal.
Total revenue increased by nearly 38.59% to ₹745.9 crore in Q2FY23, compared to ₹538.2 crore in the same period last year. Angel one reported its second-highest EBITDA margin in Q2FY23 at 40.06%, an increase of over 411 (bps) compared to 35.95% in the same quarter of the last fiscal.
The client base of Angel one jumped 77.4% to 11.57 million in September 2022 as against 6.52 million in September 2021, Business Standard reported.
On a sequential basis, the company's client base rose by 3.4% MoM from 11.18 million clients in August 2022. Angel's overall average daily turnover (ADTO) rose to ₹13,73,800 crore in September 2022, up 10.9% MoM and up 116.4% YoY. The company's ADTO from the F&O segment stood at ₹13,42,600 crore, in September 2022, up 11% MoM and up 116.8% YoY, the report said.
The company's retail turnover market share in the overall equity segment stands at 21.6% in September 2022 as against 21.5% in August 2022 and 20.3% in September 2021. The company's retail turnover market share in the F&O and cash segments stood at 21.6% and 13.2%, respectively.
In terms of financial ratios, the firm's ROE has been steadily rising over the past five years. In the March 2022 quarter, the ROE jumped to 39.43%, compared to 26.24% in the March 2021 quarter. The company grew its EBIT margin by 13% and net profit margin by 17.75% over in FY22.
After the company reported better-than-expected Q2 earnings, a number of domestic brokerage firms raised their target prices on the stock. Domestic brokerage firm HDFC securities maintain its 'buy' rating on the stock with a target price of ₹2,020/share, an upside of 24.19% from the stock's previous closing price.
The brokerage believes that the company has enough levers to maintain margins by dialing down its marketing spends in a soft customer-add environment.
On the other hand, ICICI Securities stated that Angel's steady client additions, growth in the number of orders, and cost discipline have caused the PAT to rise.
The company's ARPU in Q2 FY23 was ₹430, down 5% QoQ and 12% YoY. According to the brokerage, the decline in the ARPU was brought on by an increase in the number of clients.
Due to client additions, ICICI Securities anticipates that daily orders will be resilient in the medium term; however, it may decline in the short term, in line with market sentiment.
"We expect FY23E/24E EBITDA margin at 49%/50.7% resulting in PAT of Rs.7.5/8.5 billion, respectively. Growth optionalities remain in terms of distribution / AMC business under the umbrella brand Angel One," said ICICI securities.
The brokerage has issued a 'buy' recommendation on the stock, with a revised target price of Rs. 1,980, up from Rs. 1,830 previously.
Meanwhile, Motilal Oswal has a target price of ₹2,200/share on Angel One, which hints toward an upside of 35.25% from its latest close.
On October 5, 2020, Angel One got listed on the exchanges. The stock had a lackluster debut because it was listed 10% below the issue price of ₹306, but after a year it delivered a multi-bagger return of 352%, and after two years it increased by almost 400%.
Further Foreign investors have been bullish on the stock for a long time. This is clear given their increased exposure to the stock over the last four quarters. FIIs held a stake of 4.7% in Angel One back in June 2021. The exposure now stands at 10.5%. The majority of the increase happened in Q4FY22. The promoters hold 43.7 per cent of the shares in the company. Mutual Funds lowered their holdings to 8.9% in the June 2022 quarter. The regular shareholders own 36.70 per cent.
An average of 05 analysts polled by MintGenie have a strong 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.