Buy ANGEL One; target of Rs 1800: Motilal Oswal

Motilal Oswal's research report on ANGEL One

ANGELONE’s 4QFY23 PAT surged 30% YoY to INR2.7b (11% beat led by reversal of ESOP expense). Net revenue was 4% higher than our estimates at INR5.3b (+31% YoY), mainly due to 16% beat in net interest income. Overall operating expenses (opex) grew 19% YoY to INR2.73b (7% below our expectations). ESOP costs declined 32% QoQ, which had largely offset the impact of 28% sequential increase in other expenses to INR1.97b (11% above our estimates). CIR declined substantially to 42.5% (better than our estimate of 47.1%) from 46.0% in 3QFY23; CIR improved 264bp YoY. Ex-ESOP reversal, CIR would be in line with our expectations. The number of orders spiked to 263m in 4Q from 226m in 3QFY23. The Board recommended a final dividend of INR4 per share; this was in addition to INR35.9 per share interim dividend declared in FY23. For FY23, ANGELONE reported 41%/48% growth in total income/PAT to INR16.5b/INR6.2b.

Outlook

We raise our FY24/FY25 earnings estimates by 6.1%/7.0% to factor in higher revenue. We reiterate our BUY rating on the stock with a revised TP of INR1,800 (premised on 13x Mar’25E EPS).