A company with a ‘fundamentally strong’ nature portrays two basic characteristics, the first being the favourable debt-to-equity ratios and the second being strong financial numbers giving the company an edge at times of financial distress faced by peers in the industry.
Herein this article, we will analyze one such fundamentally strong stock with an upside of 23 percent:
Angel One Limited:
The shares of Angel One Limited closed today at Rs 1,622.45, gaining around 3.40 percent as compared to the previous closing levels of Rs 1,568.90. In the last one month, the scrip has surged over 30 percent ranging from Rs 1,214.95 during the end of May to the current price levels. The company has a market capitalization of Rs 13,600 crores.
Having a walkthrough of the financials reported by the company recently, the basic metrics indicating a smooth flow of business such as the operating revenues as well as net profits saw an increase with the former moving from Rs 2,258 crores during FY21-22 to Rs 3,001 crores in FY22-23 and the latter, during the same time horizon, moving from Rs 625 crores to Rs 890 crores.
In addition to the above, the profitability ratios were on the rise with the return on equity (ROE) moving from 39.43 percent during FY21-22 to 41.17 percent in FY22-23 and the return on capital employed (ROCE), keeping the timeframe the same, taking a shift from 55.35 percent to 56.72 percent.
The company has also been successful in reducing its debt-to-equity ratio from 0.79 times during FY21-22 to 0.36 times in FY22-23.
Motilal Oswal gave a ‘Buy’ recommendation on the stock with a target price of Rs 2,000 which represents an upside of around 23 percent as compared to the stock prices prevailing in the markets.
The rationale behind giving such a recommendation is pertaining to the company’s ‘Super’ App getting customer engagement, the robustness of its fintech model, and various technological initiatives taken by the entity.
According to the shareholding pattern data available for the March 2023 quarter, the Promoters hold a 38.48 percent stake, and Foreign Institutional Investors (FIIs) hold a 16.61 percent stake in the company.
Angel One Limited is a tech-based financial services company based in India. It provides advisory services, broking, margin funding, and distribution of financial products to its clients under the brand ‘Angel Broking’. The company operates in three broad segments such as ‘Broking’, ‘Finance’, and ‘Health’ activities.
Written by Amit Madnani
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