Potential interim dividend in play.
Dec 2024 quarter results and PPT
2 Likes
There is a drop in both profits as well as revenue which was expected after sebi’s actions. Let’s see what management has to say in concall.
1 Like
From 423 cr PAT in Q2 to 281 cr PAT in Q3. Even though Angel One & other discount brokerages did nothing wrong but … ouch! The SEBI regulations wiped out 1/3rd of their profits.
3 Likes
The way I see it, would you rather have returning customers in the long run or one time customers who loose money in f/o?
Let’s not forget that new F&O rules were applied from 20th November - for half quarter. More impact can be seen in next quarter?
3 Likes
That’s what I was thinking as well. More pain in the short term before it can get better.
All discount brokerages rely on retail traders. It’s just the way it is. And also, full service brokerage are not that lucrative either compared to discount brokerages.
e.g. ICICI Securities did around ~5000 crore of revenues vs. Zerodha ~8000 crores of revenues in FY24 despite the fact that Zerodha actually has lower no of demat accounts than ICICI Securities.
Angel One | Concall Note
a. Impact from new norms - True-to-label + F&O norms Is higher than earlier expected
b. Expect one-time hit of 18-20% to topline
c. Will monitor impact from new norms for 1-2 qtrs, before deciding on price hike
d. True-To-Label impact should not be more than 2%
e. Do not see any long-term impact on life-time value of customer
2 Likes
Angel One | Management Interview
a. CMD DInesh Thakkar said They Will Not Take A Price Increase For Next 2-3 Quarters
b. Growing Customer Base May Mitigate The Need For Price Hikes & Offset Regulatory Impact
c. Expect Margin To Get Back To 50% Level Even Without A Price Hike
d. 18-20% Impact On Topline Due To Regulatory Changes
e. Growth In Customer Base Of 40-45% Not Slowing Down
Management Interview - https://youtu.be/KKeMBiOhCps
3 Likes
My view is a bit negative (vs what the management is guiding). Here are the facts:
a) His entire assumption hinges on new customer addition. But the new customers are not trading; the activation ration has been continuously declining MoM (down from 27.5% to 26.3%, which means the incremental activation ratio is just 10-12%, which basically means, out of 10 customers getting added, only 1 is actively trading vs 2-3 earlier). or maybe the old customers are moving out of the system. Once the F&O regulation impacts are seen fully by Jan-Feb, we will also see market moderation, so its unlikely that we will see new client addition at the same pace as we saw in the last year.
b) Of the customers who are trading, they are trading less: No. of orders/clients/days has reduced from 0.36 to 0.20 in 6 months; this will reduce further in Jan-Feb. So basically one client is contributing half of the revenue they were contributing earlier.
c) Distribution income is just 28cr/quarter, and it will take atleast 1-2 years for the segment to meaningfully contribute, but all the cost are upfronted (Salary, licensiing, client acquisition cost, etc.), so margins will suffer (we has seen that in last two quarters)
e) They took price hike in cash segment and have clearly seen a loss in market share from 17.4% to 16.5% over the last 4 months, despite an increase in active client market share. This clearly shows that customers are not as sticky as we perceived it to be. Also, Zerodha/Dhan has started to turn aggressive. So probably that’s the reason Angel One is not keen on taking price hike in F&O segment.
To sum up, I see near-term headwinds in terms of slower client addition, lower trades per client, lower activity in the market in general, and higher costs due to scale-up of wealth/distribution business.
Disclaimer: This is my near-term view and might change in 2-3 quarters
15 Likes
Motilal Oswal report on Angle one:
They have estimated EPS of 215 without factoring in any new business.
2 Likes
brokerage report doesn’t make much sense, things which makes me worry is they are trying to do everything like wealth management, mutual fund (which is already very crowded), insurance and lending business also.
i wish they conquarer all, but it would have been better if they had focused on1 at a time & it should have been wealth management only.
disclaimer : i am a little worried investor but tried to put up things being unbiased.
3 Likes
Angel One | January 2025 Business Update
- Client Base: 30.13 million (+2.1% MoM, +47.5% YoY)
- Gross Client Acquisition: 0.66 million (-15.4% MoM, -36.0% YoY)
- Avg. Client Funding Book: ₹41.99 billion (+3.1% MoM, +86.7% YoY)
- Total Orders: 125.96 million (+5.4% MoM, -24.3% YoY)
- Average Daily Orders: 5.48 million (-3.7% MoM, -27.6% YoY)
- Unique MF SIPs Registered: 765.8K (-12.2% MoM, +57.7% YoY)
Turnover & Market Share
- Overall ADTO: ₹30,824 billion (+6.2% MoM, -29.8% YoY)
- F&O ADTO: ₹30,104 billion (+6.3% MoM, -30.6% YoY)
- Option Premium Turnover: ₹850 billion (+1.6% MoM, +28.3% YoY)
- Cash ADTO: ₹65 billion (-12.5% MoM, -19.5% YoY)
- Commodity ADTO: ₹655 billion (+3.4% MoM, +81.9% YoY)
Market Share
- Equity Option Premium: 19.7% (+31 bps MoM, +192 bps YoY)
- F&O Market Share: 21.8% (+15 bps MoM, +241 bps YoY)
- Cash Turnover: 16.6% (+11 bps MoM, +107 bps YoY)
- Commodity Market Share: 61.2% (+133 bps MoM, +180 bps YoY)
The company plans to continue providing monthly updates on key business metrics.
Watch here
3 Likes
Stock trades at a P/E of 16, 5 year and 3 year Sales CAGR/Profit CAGR are at 41%/70% and 49%/55% respectively and pays a consistent dividend too. Lowest P/E in last 5 years is 11. Wonder why the P/E is so low for such a good stock
It is a cyclical business right? futures and options volumes are volatile with mkt movements. So generally business has more volatility in earnings with operating leverage symmetry. So low pe industry. If wealth mgmt business scales up this cyclicality comes down and rerates
The initial crash was due to changes in FnO rules by SEBI, then the market started going down and being a capital market stock it had to go down. While FnO has impacted the margins they have shown resilience in revenue and profits.
Once the market starts recovering I feel this will bounce back.
DIsc: Invested and accumulating heavily.
1 Like
Seems like an overreaction to me. More than 90% of the customers of Angel One will not even get to know about the breach and more than 99% do not understand the impact. In a month everyone will forget about this.
This is an old cirular. That day when this circular was posted to exchange the stock was down 3%. I think on friday market hours.