Motilal Oswal's research report on ANGEL One
ANGELONE's PAT surged 18% QoQ and 59% YoY to INR2.1b (11% beat) in 2QFY23. The profitability was driven by a 3% beat in operating revenue, which rose 8% QoQ and 52% YoY to INR4.6b. The key contributor to the outperformance was the 10% beat in net interest income. The volatility in the equity market led to a decline in the active client ratio to 36.2% in 2Q from 38.5% in 1QFY23. Operating expense grew 30% YoY, but was flat QoQ at INR2.7b (6% lower than our expectations), driven by a 59% YoY jump in employee costs. Other expenses grew 19% YoY to INR1.6b, 11% lower than our estimate. This was in spite of one-off expenses of INR166m. CIR declined substantially to 47.6% (better than our estimate of 51.7%) from 51.6% in 1QFY23. The same improved 500bp YoY. Except for a one-off item pertaining to a reversal of the margin penalty for the last four quarters that was passed to clients, CIR stood at 44.7%. The number of orders improved to 230m in 2QFY23 from 207m QoQ. The board has recommended a dividend of INR9 per share.
Outlook
We have raised our estimates by 5-6% to factor in a lower-than-expected operating cost in 2QFY23. We expect some part of this to be sustainable, given the management's outlook of declining customer acquisition costs. We maintain our Buy rating on the stock with a revised TP of INR2,200 (premised on 18x Sep'24E EPS).
More Info
At 17:30 Angel One was quoting at Rs 1,648.70, up Rs 60.95, or 3.84 percent.
It has touched an intraday high of Rs 1,673.00 and an intraday low of Rs 1,621.25.
It was trading with volumes of 189,186 shares, compared to its thirty day average of 59,627 shares, an increase of 217.28 percent.
In the previous trading session, the share closed down 0.06 percent or Rs 1.00 at Rs 1,587.75.
The share touched its 52-week high Rs 2,022.00 and 52-week low Rs 992.00 on 29 April, 2022 and 30 November, 2021, respectively.
Currently, it is trading 18.46 percent below its 52-week high and 66.2 percent above its 52-week low.
Market capitalisation stands at Rs 13,736.32 crore.
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