Result Analysis: Angel One Ltd. (CMP: Rs.1315) Result Update: Q3FY23

Angel One is one of the leading full-service retail brokerage house in the country and is engaged in the business of stock, currency and commodity broking, providing margin trading facility, depository services and distribution of mutual funds, to its clients; and earns brokerage, fees, commission and interest income thereon. The Company has also been providing portfolio management services.

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    Stock Details
    Market Cap. (Cr.) 10967
    Equity (Cr.) 83.37
    Face Value 10
    52 Wk. high/low 2022 / 1066
    BSE Code 543235
    Book Value (Rs) 226.33
    Sector Finance           


    Key Ratios
    Debt-equity: 0.89
    ROCE (%): 35.47
    ROE (%): 46.02
    TTM EPS: 91.69
    P/BV: 5.8
    TTM P/E: 14.35

                   Result Highlights:

    •   Total Consolidated Revenue of Angel One has grown marginally on QoQ basis by 1.8% but on YoY basis, it has increased by 25% to Rs.759.7 cr. in Q3FY23. Company has clocked PAT of Rs.228 cr. in the Dec. quarter, growth of 6.8% QoQ and 38.5% YoY.
    • EBITDA margin of the company has increased sequentially by 416bps and 649bps on YoY basis to 46.7%.
    • Total client base of the company has grown sequentially by 8.1% QoQ and 60.7% YoY and has reached to 1.25cr. in Q3FY23 vs. 1.16cr. in Q2FY23.
    • Gross client acquisition for the Q3FY23 was 0.99 mn compared to 1.18 mn in the Q2FY23 and 1.34 in the Q3FY22.
    • Average daily turnover of the company in all segments increased by 19% QoQ and 108.4% YoY to Rs.14,478 bn. in Q3FY23.
    • Total retail turnover market share of Angel One in overall equity segment stood at 21.5%; for F&O it is 21.6%, for the Cash and Commodity it is 13.3% and 52.4% for the Dec. quarter.
    • Company’s average revenue per client has declined by 7.4% from Rs.430 to Rs.398 on QoQ basis.
    • Number of orders processed in the Dec.’23 quarter has declined by 1.4% to 22.4cr. compared to previous quarter of FY23.
    • The board has declared an interim dividend of Rs 9.60 per share.

    Management Commentary:

    • Commenting on the December results, Mr. Dinesh Thakkar, Chairman & MD said, India’s Capital Market created a milestone as the total demat base grew to over 108 million as of December ’22. Happy to see positive results of our digital strategy, and strongly believe we are well positioned to garner a larger market share of this expanding market. In line with our dividend policy, the Board of Directors have declared a distribution of 35% of the quarter’s profit, as a third interim dividend to the shareholders.
    • Mr. Narayan Gangadhar, Chief Executive Officer said, Angel is amongst the few players to witness consistent growth, both operationally and financially. We continue to gain market share in total demat accounts, to 11.6%; achieved 12.0% share in NSE active clients and are firmly amongst the top 3 largest new-age digital brokers in India; reported our highest quarterly ADTO with steady orders and turnover market share.


    Financial Performance:


    Shareholding Pattern:

    Particulars %
    Promoters & Promoter Group 43.71
    FIIs 17.04
    DIIs 9.73
    Public 28.15
    Others 1.37


    Angel One has reported overall muted performance in the December’23 quarter with stagnated growth of 1.8% in Revenue and 6.8% growth in PAT compared to September’23 quarter. Company’s average revenue per client has declined by 7% QoQ and gross client addition was down by 16.2% sequentially in the quarter. However, company added 10 lakh clients in Q3FY23 and reached to the total client base of 1.25cr. Company has 11.6% share in the total demat accounts in the country and 12% share in the Active client base of NSE at the end of December’23 quarter. Angel One remains one of the strong player and has big headroom to grow in the Indian brokerage industry which is a largely underpenetrated industry compared to USA or China. For the nine months of FY23 company has reported the earnings of Rs.74.87 and we expect the company to close the FY23 at the eEPS of Rs.99.8. Based on the estimated earnings the expected PE of the company is 13x at the CMP of Rs.1315.


    Particulars (In Rs. Cr.) Q3FY23 Q2FY23 Q3FY22 QoQ% YoY% 9M FY23 9MFY22 FY22
    Interest Income 106.9 95.9 91.3 11.5% 17.1% 311.6 236.1 332.8
    Fees and Commission Income 609.2 619.7 496.9 -1.7% 22.6% 1,789.6 1,322.2 1,896.1
    Net Gain on Fair Value changes 2.3 1.2 9.2 91.0% -75.1% 3.7 29.1 29.7
    Revenue from operations 718.5 716.8 597.4 0.2% 20.3% 2,105 1,587 2,259
    Other Income 41.2 29.2 9.8 41.0% 320.2% 85.1 26.3 38.5
    Total Income 759.7 746 607.2 1.8% 25.1% 2,190 1,614 2,297
    Fees and Commission Expense 159.2 162.7 144.1 -2.1% 10.5% 473.5 393.8 550.2
    Impairment on Financial instrument 0.3 0.4 2.8 -19.3% -88.5% 2.2 3.0 3.6
    Employee Expense 111.4 109.5 78.0 1.7% 42.9% 322.4 206.0 280.9
    Other Expense 153.4 156.3 138.3 -1.9% 10.9% 470.6 382.3 534.9
    EBITDA 335.3 317.1 244 5.7% 37.4% 921.3 628.4 927.5
    EBITDA Margin (%) 46.7% 42.5% 40.2% 416 bps 649 bps 43.8% 39.6% 41.1%
    Finance Cost 25.4 24.5 18.3 3.8% 39.0% 69.7 52.6 72.1
    Depreciation & Amortisation expense 8.0 6.9 4.8 15.7% 66.3% 21.3 13.4 18.6
    Profit Before Tax 301.9 285.7 220.9 5.7% 36.7% 830.2 562.4 836.7
    Tax 73.9 72.1 56.2 2.4% 31.4% 207 142.1 211.7
    Profit After Tax 228.0 213.6 164.7 6.8% 38.5% 623.2 420.3 625.1
    PAT Margin (%) 31.7% 28.6% 27.1% 311 bps 462 bps 29.6% 26.5% 27.7%
    Segment Revenue (In Rs. Cr.) Q3FY23 Revenue % Q2FY23 QoQ% Q3FY22 YoY%
    Broking & Related services 758.38 99.8% 744.42 1.8% 601.81 26.0%
    Finance & investing activities 1.25 0.2% 1.88 -50.1% 4.44 -71.8%
    Unallocated 0.03 0.0% 0.04 -26.7%
    Source: Company website, EWL Research

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