Why Angel One Share Price is Falling

The stock market crashed by over 1,000 points yesterday.

The sharp decline was attributed to unfavourable global cues. Global markets witnessed a significant sell-off, resulting in a similar response in domestic markets due to strong US payroll data suggesting fewer rate cuts in 2025.

The Sensex fell 1,048 points while the Nifty fell 345 points. Many stocks saw their share price take a hit as a result of this massive decline.

While markets are up today, there are still a few stocks that are down.

Prominent among them is Angel One. The company's share price is down over 12% over the last five days. What's behind the decline? And what does the future hold in store for Angel One?

Let's find out...

Stock Skids as New F&O Norms Impact Q3 Results

Shares of Angel One fell today after the company reported disappointing results for the December 2024 quarter.

The company's revenue fell 17% sequentially to Rs 12.6 bn, while its operating profit fell by 26% to Rs 5 bn impacted by the regulator's new futures & options norms.

The company's revenue for the broking segment also fell 10% from the previous quarter to Rs 6.2 bn, impacted by the new F&O regulations and weak market sentiments on the cash brokerage.

The company's margin and profitability were also impacted by higher operating expenses, as its cost to income ratio increased to 60.71% from 55.65% in September.

The company's operating profit margin fell by 5% to 39.3% from 44.4%, while its net profit fell by 34% from the previous quarter to Rs 2.8 bn.

However, on a year-on-year basis, the company reported a 19.2% YoY increase in revenue. Operating profit grew 24.7% YoY while net profit grew 8.1% YoY.

However, the operating profit margin remained flat at 39% on a YoY basis.

The board of directors recommended a dividend of Rs 11 per equity share, totalling approximately Rs 993 m, which is about 35.3% of the consolidated profit after tax for the quarter. The results came after the close of the market hours.

The company has onboarded Ambarish Kenghe as its new group chief executive officer. He quit as the vice president of Google Pay to join the stock broking firm.

He had joined Google in May 2018 and was leading Google Pay for the last six years. Prior to Google, he was with ecommerce major Myntra and had worked at consulting major Bain and Company.

Ambarish Kenghe joins Angel One as the group CEO after Narayan Gangadhar left the company in 2023. Since then, Angel One chairman Dinesh Thakkar was leading the firm.

What Next?

Angel One is optimistic about its future, recognising the potential for continued growth in the capital market. Dinesh Thakkar, Chairman and Managing Director, said...

• India's capital market remains on a growth trajectory, reflecting increasing trust among retail investors. The evolving regulatory landscape has fostered greater client confidence, ensuring long-term retention and participation.
  
  While a few regulations introduced this quarter caused a temporary industry-wide impact, we are confident that our aggressive client acquisition strategy, coupled with the normalisation of client activity, will drive renewed growth momentum in the coming quarters.

Looking ahead, the company's strategy focuses on innovation, enhancing client experience, and fostering sustainable business practices.

Coming to financials, Angel One's business has grown dramatically over the last three years on the back of an increase in retail investor participation in the stock market.

The company's revenue has grown at a compounded annual growth rate (CAGR) of 49% while its net profit has grown at a CAGR of 55%. This has translated into strong return ratios.

Angel One Financial Snapshot (2020-2024)

Rs m, consolidated	FY20	FY21	FY22	FY23	FY24
Net Sales	7,246	12,637	22,911	30,016	42,717
Growth (%)	-5%	74%	81%	31%	42%
Operating Profit	1,896	4,718	9,313	13,130	17,004
OPM (%)	26%	37%	41%	44%	40%
Net Profit	823	2,969	6,248	8,900	11,255
Net Margin (%)	11%	23%	27%	30%	26%
ROE (%)	15.5	34.8	46.3	48.5	44.5
ROCE (%)	13.6	26.8	35.5	44.3	38.8
Dividend (Rs)	2.7	12.9	27.1	39.9	34.7
Debt to Equity (x)	0.8	1	0.8	0.4	0.9

Source: Equitymaster

Angel One's customer base predominantly consists of young millennials, with approximately 90% of them aged below 30. Moreover, nearly 90% of them belong to Tier II, III, and IV cities, and a significant majority (around 85%) are first-time entrants to the financial market.

Angel One's primary target market is the young demographic from smaller cities with a keen interest in investing in the share markets. Thus, the company does have a long runway of growth.

However, investors should also take note of the fact that the futures & options (F&O) segment is very volatile and Angel One derives a huge chunk of its revenue from this segment.

It also faces stiff competition from the top 2 players in the industry (still unlisted) - Zerodha and Groww.

Going ahead, the management expects a hit of 13-14% in broking and related income due to new F&O regulations. The wealth segment is expected to achieve a breakeven in the next three years, while other new businesses could achieve a breakeven in two years.

Business diversification remains in focus. The company has launched the distribution of credit products in partnership with three NBFCs, and three more are in the pipeline.

On the wealth management side, the company is expanding its team as well as presence. New talent is being on-boarded with tech expertise and proven track record of success. On the AMC front, it is in the final approval stages.

How Angel One Share Price has Performed Recently

In the past five days, the stock is down 11% The stock is also down 25% over the last one month.

However, over the last five years, the stock is up by 96%.

The stock touched its 52-week high of Rs 3,893.5 on 15 January 2024 and a 52-week low of Rs 2,027 on 23 July 2024.

At the current price, the company trades at a price to earnings multiple of 15.95 and price to book multiple of 4.2.

About Angel One

Angel One, earlier known as Angel Broking, is the largest independent listed full-service retail broking house in India.

The company is a member of the National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE), and Multi Commodity Exchange of India Limited (MCX).

The company is engaged in stock, currency, and commodity broking. It provides margin trading facility, depository services, and distribution of mutual funds to its clients. It earns brokerage, fees, commissions, and interest income on these activities.

It has also been providing portfolio management services (PMS). The broking services include equity, commodity, and depository operations.

For more details, see the Angel One company fact sheet and quarterly results on our website.

You can also compare the company with its peers.

Angel One vs Motilal Oswal

Angel One vs 5 Paisa Capital

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...