On Wednesday, Investec analyst Nidhesh Jain adjusted the price target for ANGELONE:IN (Angel One Ltd) to INR3,750.00, marking an increase from the previous INR3,000.00, while reaffirming a Buy rating on the stock. The revision comes in response to Angel One’s second-quarter performance, which aligned with expectations, showcasing a profit after tax (PAT) of INR4.2 billion, a 39% year-over-year increase. This growth was attributed to robust margin trading facility (MTF) income, an uptick in other operating income due to the expansion of distribution income, and moderate growth in non-employee expenses.
The quarter was particularly distinguished by the scale-up of the credit distribution and MTF book, along with management’s guidance on the potential impact of futures and options (F&O) regulation, which is estimated to affect 13%-14% of revenues. Investec finds the company’s guidance credible and has accordingly upgraded its estimates to incorporate higher income from credit and MTF services.
Angel One’s reported earnings are considered to be conservative, as the company fully expenses both customer acquisition costs and the costs of new initiatives in the profit and loss statement, which accounts for approximately 75% of their EBITDA. The firm also notes that Angel One has potential for multiple long-term business adjacencies. However, Investec also acknowledges risks, including the potential for a greater than anticipated impact from F&O regulation and the widespread adoption of UPI autopay for secondary trades.
Despite these risks, Angel One’s stock is currently trading at 19 times the forecasted FY26 earnings per share based on the updated estimates. The new price target of INR3,750 reflects these considerations, with Investec maintaining a positive outlook on the stock’s performance.
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