ICICI Securities research report on Angel One
Angel One (Angel) is gradually focusing on its business strategy to expand product portfolio beyond broking and increasing the reach through improved digital collaboration with offline partners, while continually augmenting its core digital capability through SuperApp. The company is also open to suitable inorganic opportunity. While the degree of success in an aggressive fintech strategy remains to be seen, we remain positive on more than 15% earnings CAGR potential driven by core business growth while cross-sell optionalities are likely to become more tangible in FY24-25E.
Outlook
However, post 35% rally in stock price over past three months, we downgrade the stock to HOLD from BUY as core broking earnings will remain dependent on capital market momentum. We expect revenue/opex/PAT CAGR of 16/17.5/17% between FY23-25E. Our revised target price stands at Rs1,622 (earlier: Rs1,590) based on 12x (unchanged) FY25E EPS of Rs135 (earlier Rs133). Risks include capital market volatility, higher costs in new initiatives and restriction on client onboarding in the Authorised Partner (AP) channel as per recent NSE order (details below).
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