Stock falls by 7% following Q3 results that fall short of market estimates, with earnings per share dropping by 33%.
Stock falls: Online discount brokers such as Angel One, 5paisa, and Zerodha have experienced significant growth in the post-COVID era. This surge can be attributed to the increased retail participation in the stock market, the low brokerage fees offered by these platforms, and their user-friendly digital interfaces. The pandemic prompted many individuals to explore alternative investment options, with these brokers providing cost-effective trading solutions.
Despite this growth, India’s stock market remains relatively underpenetrated, with only around 5-6% of the population actively investing. This presents a substantial opportunity for expansion. The younger, tech-savvy demographic, coupled with the increasing financial literacy, further supports this upward trend. Brokers are diversifying their offerings by venturing into mutual funds and SIPs, while incorporating technology-driven features like robo-advisors to enhance the user experience.
As financial inclusion improves and internet accessibility expands, online brokers are well-positioned for continued growth, particularly in tier-2/3 cities and rural areas.
In terms of Angel One Limited’s performance, the company’s shares are currently trading at Rs. 2,381, reflecting a 2.67% decrease from its previous close. Despite hitting an intraday low of Rs. 2,274, the stock has shown signs of recovery as of January 14, 2025.
Angel One Ltd reported robust financial results for December 2024 compared to the same period in 2023. Sales increased by 19% from ₹1,059 crore to ₹1,262 crore, while EBITDA rose by 24.6% from ₹398 crore to ₹496 crore, indicating improved operational efficiency. The operating profit margin also saw a slight improvement, climbing from 38% to 39%.
Net profit grew by 8.1%, from ₹260 crore to ₹281 crore, showcasing a strong performance with growth in both top-line and bottom-line figures, as well as enhanced operational efficiency, signaling a drop by 33% and 5% QoQ respectively. Additionally, the revenue and net profit have also dropped by 17% and 36% QoQ respectively.
Management Commentary
In a recent statement, Dinesh Thakkar, Chairman and Managing Director of Angel One Ltd, expressed optimism about India’s capital market growth. He highlighted the increasing trust among retail investors and credited the evolving regulatory landscape for fostering greater client confidence, leading to long-term retention and participation.
Thakkar acknowledged that some regulations introduced in the last quarter had a temporary industry-wide impact. However, he emphasized the company’s aggressive client acquisition strategy and predicted that the normalization of client activity would drive renewed growth momentum in the upcoming quarters.
About the Company
Angel One Ltd is a leading financial services company that offers a diverse range of products and services. The company’s core activities include stock, commodity, and currency broking, institutional broking, margin trading, and depository services. Additionally, Angel One operates as a Non-Banking Financial Company (NBFC) providing lending services and acts as a corporate agent for insurance companies.
Angel One’s comprehensive offerings encompass broking services, research, investment advisory, margin trading, loans against shares, distribution of third-party financial products, and investor education. The company serves both retail and institutional clients, striving to deliver holistic financial solutions across various segments.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.