Angel One share price skids 7% to hit 5-month low as Q3 earnings disappoint

Shares of Angel One, a leading retail full-service broking firm in India, dropped 7% during early morning trade on Tuesday, January 14, to a five-month low of ₹2,275 apiece after the company’s Q3FY25 results came below Street expectations.

The company reported an 8.1% growth in consolidated net profit at ₹281.4 crore for the December quarter, compared to ₹260.4 crore in the same period last year. However, this marked the smallest quarterly profit increase since its listing in 2020, as tighter regulations in the derivatives segment weighed on its performance.

Sequentially, net profit declined significantly from ₹423 crore in the September quarter. Revenue from operations rose 19.2% year-on-year (YoY) to ₹1,262.2 crore in Q3FY25, compared to ₹1,059 crore in the same period last year. 

On the operational front, EBITDA grew 24.7% YoY to ₹496 crore, compared to ₹397.8 crore in the same period last year. However, the operating profit margin remained flat at 39% on a YoY basis but contracted by 500 basis points quarter-on-quarter (QoQ).

In October, the Securities and Exchange Board of India (SEBI) announced tighter rules for equity derivatives, raising the entry barrier and increasing trading costs in the segment. Authorities had expressed concerns over the unchecked rise in retail investor activity in derivatives trading.

“While a few regulations introduced this quarter caused a temporary industry-wide impact, our aggressive client acquisition strategy, coupled with the normalisation of client activity, will drive renewed growth momentum in the coming quarters,” said Dinesh Thakkar, Chairman & Managing Director of Angel One.

To offset the impact of tighter regulations, the company increased brokerage charges during the quarter, including those on options and futures trading.

Meanwhile, the board also declared its first interim dividend for FY25 at ₹11 per share on equity shares with a face value of ₹10 each, amounting to ₹99.3 crore.

Angel One key metrics

Angel One’s average daily turnover (ADTO) on a notional basis declined by 11.8% QoQ to ₹40 trillion in Q3FY25, from ₹45.4 trillion in the previous quarter. The domestic brokerage's margin in the December quarter came in at 39.3 per cent compared to 37.6 per cent in the year-ago period.

The company added 2.1 million clients during the quarter, representing a 30.3% QoQ decline in new client additions.

The client base stood at 29.5 million, marking a 7.4 per cent growth from the previous quarter.

Angel One stock corrects 41% from all-time high

Angel One shares have lost 22% of their value in January so far, pushing the stock to a 41.35% discount from its all-time high of ₹3,896, recorded in January last year. The stock ended CY24 with a negative return of 16%.

Despite the steep correction, the stock has delivered multibagger return of 661% over the past five years.

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