Angel One shares: Why this stock rallied 11% today? Buy, says MOFSL
Angel One stock: MOFSL said Angel One has demonstrated its ability to protect profitability by taking corrective pricing actions to offset the impact of true to label charges regulations.
- Oct 15, 2024,
- Updated Oct 15, 2024 11:04 AM IST
Shares of Angel One Ltd climbed about 11 per cent in Tuesday's trade as better-than-expected operational efficiency led to profit beat in the September quarter. The stock climbed 10.65 per cent to hit a high of Rs 3,011.65. With this, the stock has cut year-to-date losses to 17 per cent. MOFSL retained its 'Buy' rating on the stock ahead of the concall today.
Angel One reported 39.14 per cent YoY rise in profit at Rs 423 crore. It beat MOFSL estimates by 5 per cent. The 29 per cent YoY growth in gross broking business was driven by growth in F&O segment (up 23 per cent YoY) and cash segment (52 per cent YoY).
Net interest income stood at Rs 2.8b, up 83 per cent YoY, which was in line with expectations. Average client funding book stood at Rs 3,890 crore against Rs 1410 crore in the year-ago quarter. Other income also increased 57 per cent.
MOFSL said Angel One has demonstrated its ability to protect profitability by taking corrective pricing actions to offset the impact of true to label charges regulations.
The impact of new F&O regulations for index options — wherein the number of weekly expiries will be restricted to one per exchange and lot sizes will be increased to Rs 15 lakh to Rs 20 lakh, along with other measures — is expected to impact volumes.
"Angel One will decide on its pricing action to offset the impact of these measures post implementation. Nevertheless, the company has maintained that over the longer term, margins will be brought back to 45-50 per cent. Further, new businesses such as distribution of loans, fixed deposits, wealth management, and AMC are likely to gain traction over the medium term," it said.
For now, the brokerage has suggested a 'buy' on the stock but said it would review its estimates after the concall today.
Shares of Angel One Ltd climbed about 11 per cent in Tuesday's trade as better-than-expected operational efficiency led to profit beat in the September quarter. The stock climbed 10.65 per cent to hit a high of Rs 3,011.65. With this, the stock has cut year-to-date losses to 17 per cent. MOFSL retained its 'Buy' rating on the stock ahead of the concall today.
Angel One reported 39.14 per cent YoY rise in profit at Rs 423 crore. It beat MOFSL estimates by 5 per cent. The 29 per cent YoY growth in gross broking business was driven by growth in F&O segment (up 23 per cent YoY) and cash segment (52 per cent YoY).
Net interest income stood at Rs 2.8b, up 83 per cent YoY, which was in line with expectations. Average client funding book stood at Rs 3,890 crore against Rs 1410 crore in the year-ago quarter. Other income also increased 57 per cent.
MOFSL said Angel One has demonstrated its ability to protect profitability by taking corrective pricing actions to offset the impact of true to label charges regulations.
The impact of new F&O regulations for index options — wherein the number of weekly expiries will be restricted to one per exchange and lot sizes will be increased to Rs 15 lakh to Rs 20 lakh, along with other measures — is expected to impact volumes.
"Angel One will decide on its pricing action to offset the impact of these measures post implementation. Nevertheless, the company has maintained that over the longer term, margins will be brought back to 45-50 per cent. Further, new businesses such as distribution of loans, fixed deposits, wealth management, and AMC are likely to gain traction over the medium term," it said.
For now, the brokerage has suggested a 'buy' on the stock but said it would review its estimates after the concall today.