Research firm Trade Brains analyst gave a buy call with a potential upside of 47% on one of India’s leading full-service retail broking firms.
On Friday, Angel One Ltd shares closed at ₹2,621.20, up 1.52 percent from the previous close on the National Stock Exchange. The company currently holds a market capitalization of ₹23,288 crore.
The company specializes in stock, commodity, and currency broking, institutional broking, margin trading facilities, depository services, mutual fund distribution, lending as an NBFC, and acting as corporate agents for insurance companies.
In the past six months, Angel One Ltd’s shares have declined by 20%. However, over the last 12 months, they have surged by an impressive 61%.
According to the company’s recent filing, its client base surged by 63.3% year-on-year, rising from 14.59 million in May 2023 to 23.83 million in May 2024. Concurrently, orders increased by 75.2%, from 90.60 million to 158.72 million during the same period.
Average daily orders saw an 83.5% rise, climbing from 4.12 million to 7.56 million from May 2023 to May 2024. Additionally, gross client acquisition grew by 91% year-on-year, and the company’s cash turnover market share expanded to 17.1% in May 2024, up from 13.3% in May 2023.
In the fourth quarter of the fiscal year 2024 (Q4FY24), Angel One Ltd posted a consolidated net profit of ₹340 crores, representing a 31% rise from the ₹260 crores reported in the previous quarter (Q3FY24). The company’s total revenue for Q4FY24 surged by 28%, reaching ₹1,357 crores compared to ₹1,059 crores in the same quarter of the previous year.
Research firm Trade Brains Analyst has given a ‘buy’ rating on Angel One Ltd with a target price of ₹3,850 per share and an upside of 47 percent based on Friday’s close price of ₹2,621.20 per share – view report, the rationale behind the target is as follows,
Analysts highlighted that Angel One achieved its highest-ever quarterly gross client acquisition in Q4 FY24, reaching 2.9 million, expanding its client base to 22.2 million. By May ’24, the client base grew further to 23.83 million as per the latest business updates.
Angel One demonstrated significant growth in Average Daily Orders (ADO), rising from 5.8 million in Q3 FY24 to 7.6 million in Q4 FY24, according to the report.
Moreover, both ‘F&O’ and ‘Cash’ orders showed QoQ growth, with ‘F&O’ orders increasing from 74 million in Q3 FY24 to 102 million in Q4 FY24, a 38% growth, and ‘Cash’ orders rising from 262 million to 355 million, marking a 35% increase, the report added.
Angel One’s Management targets a 35% market share in new client acquisitions, in addition to maintaining a 15% share in the NSE active client base as of Q4FY24. The company aims to onboard new clients by capitalizing on market opportunities and converting inquiries into active platform users.
Angel One anticipates an Operating Profit Margin (OPM) of 43% – 45% in the upcoming year, factoring in the growth impact from its expanding businesses in AMC and wealth management.
The company’s strategic emphasis on digital solutions, including the launch of its Super App, has been pivotal in driving growth and enhancing client engagement, as noted by analysts in their report.
Written by Omkar Chitnis
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