Angel One Shares Surge Over 7% ; 'Buy' Rating with Rs 3,000 Target Price

Shares of Angel One climbed over 7% in trading on October 3, 2024, following a favourable analysis from global brokerage firm Investec, which recommended a 'Buy' rating on the stock. The stock gained despite the recent tightening of Futures & Options (F&O) regulations by the Securities and Exchange Board of India (SEBI), highlighting investor confidence in the company's growth prospects.

Investec's Positive Outlook

Investec, in its latest report, upgraded its profit after tax (PAT) estimates for Angel One for the fiscal year 2026 by 7%. This optimism comes in the wake of SEBI’s updated F&O regulations, which have been slightly relaxed compared to earlier drafts. According to the report, the anticipated impact on F&O trading volumes is now expected to be around 25%, rather than the feared 30%, offering some relief to market participants.

Angel One, known for its popular broking app, has already adjusted its pricing strategies to mitigate the effects of these regulatory changes. The company has additional levers it can utilize to enhance its revenue streams, which could further strengthen its market position. As per Investec’s analysis, Angel One is well-positioned to navigate these regulatory shifts and continue delivering strong financial performance.

The brokerage has set a price target of Rs 3,000 per share, reflecting a significant upside potential from the stock's current trading price. At the time of publication, Angel One shares were trading at Rs 2,767.95 on the NSE, up by 6.46%. This marks the fourth consecutive day of gains for the stock, which has risen 11.61% in that period.

Strong Market Performance

Angel One has consistently outperformed the market over the past year. Data from the Bombay Stock Exchange (BSE) reveals that the stock has surged 50.06% in the last 12 months. Over a three-year period, the stock has skyrocketed by 102.42%, demonstrating the company's long-term growth potential. In the last three years, the stock has also seen a rise of 91.28%, reinforcing its position as a key player in the financial services sector.

Financial Highlights

Angel One’s financial results for the April-June quarter of fiscal year 2025 (Q1FY25) have further bolstered investor confidence. The company’s net profit for the quarter increased by 36% year-on-year (YoY) to Rs 297 crore, up from Rs 218 crore in the same period last year. Revenue growth has been even more impressive, jumping 74% YoY to Rs 1,394 crore in Q1FY25, compared to Rs 802 crore in the year-ago period.

At the operating level, Angel One’s EBITDA saw a 49% YoY increase, rising to Rs 474 crore from Rs 317 crore in the corresponding quarter last year. This substantial growth reflects the company’s ability to adapt to changing market conditions and capitalize on new opportunities in the financial sector.

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With strong financial performance, strategic pricing adjustments, and a positive outlook from Investec, Angel One is positioned for continued growth despite the tightening of F&O norms by SEBI. The brokerage firm’s recommendation of a Rs 3,000 price target offers significant upside for investors, making it a compelling 'Buy' in the current market.

[Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making any investment decisions.]