Over the last year, Angel One's stock has surged by 50.06%, and in the past three years, it has gained 102.42%, reflecting its strong market performance. The company's consistent growth has been attributed to its ability to navigate regulatory challenges and capitalize on favorable market trends.
Brokerage Call and Forecast: Investec reiterated its 'Buy' rating on Angel One, citing strong future growth potential. The brokerage also raised its profit-after-tax (PAT) estimates for FY26 by 7%. The new price target set by Investec stands at ₹3,000 per share, offering significant upside from the current price levels. According to the brokerage report, the impact of the newly announced SEBI F&O regulations on Angel One's volumes is expected to be lower than initially feared. The revised guidelines indicate a 25% reduction in F&O volumes, down from the earlier estimate of 30%, due to less severe regulatory changes.
Additionally, Angel One has strategically increased its prices to mitigate the regulatory impact, allowing the company to sustain revenue growth. Investec emphasized that the firm has multiple avenues to continue increasing revenue in the future, further reinforcing its bullish stance on the stock.
SEBI's New F&O Norms: SEBI's recent decision to tighten F&O (futures and options) trading norms had sparked concerns across the brokerage industry. However, the final regulations turned out to be less stringent than initially anticipated, leading to a less pronounced impact on trading volumes. Despite these changes, Angel One has proactively adjusted its pricing structure, demonstrating its agility in navigating regulatory environments.
Financial Performance: Angel One has delivered strong financial performance in the April-June quarter of FY25. The company reported a net profit of ₹297 crore, marking a 36% year-on-year (YoY) growth. Revenue surged by 74% YoY to ₹1,394 crore, compared to ₹802 crore in the same period last year. On the operating front, Angel One's EBITDA rose by nearly 49% YoY to ₹474 crore, up from ₹317 crore in the year-ago quarter.
This impressive financial growth has been driven by Angel One's expanding customer base and effective cost management strategies. The company's performance in Q1FY25 has further strengthened investor confidence, especially with the brokerage's ability to generate strong revenues even in a challenging regulatory environment.
Outlook: With a robust financial performance and the brokerage community's support, Angel One is well-positioned for continued growth. Investec's upgraded PAT forecast and its ₹3,000 price target underline the potential for further upside in the stock. Despite regulatory headwinds, Angel One's proactive measures, including price hikes and strategic growth levers, have set it on a path of sustained profitability and market leadership.
Conclusion: Angel One's ability to adapt to regulatory changes while maintaining strong financial performance has solidified its position in the market. With Investec's optimistic outlook and a substantial price target, the stock remains an attractive investment opportunity, particularly for long-term investors seeking exposure to the financial services and broking sector.
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