Buy ANGEL One; target of Rs 4000: Motilal Oswal

Motilal Oswal's research report on ANGEL One

Angle One reported a PAT of INR2.6b, a 17% miss on our estimates and saw a growth of 14% YoY. Net Revenue grew 49% YoY to INR6.9b (broadly in line with our estimate). CI ratio increased significantly to 56% (vs. our estimate of 48.8%), an increase of 730bp sequentially. Expenses came in 13% higher than our estimates. This is because admin & other expenses came in 17% higher than expectations. The Board has declared a third Interim Dividend for FY24 at the rate of Rs. 12.7/- per share. The Board has approved the raising of funds through the issuance of NonConvertible Debentures, amounting to up to INR5b, in one or more tranches on a private placement basis. For 9MFY24, revenue/PAT grew 41%/26% YoY to INR18.8b/INR7.8b.

Outlook

We have cut our FY24/FY25/FY26 earnings estimates by 6.8%/5.2%/3% to factor in higher operating cost (employee & admin cost) on account of continued momentum in client acquisition and investments into new businesses. We reiterate our BUY rating on the stock with a revised TP of INR 4,000 (premised on 20x Mar’26E EPS).