Company Update : Angel One Ltd By Motilal Oswal Financial Services Ltd
In-line performance
* Gross broking revenue at ~INR7.9b grew 7% QoQ (in-line), impacted by slight recovery in F&O activity (F&O brokerage up 5% QoQ and in-line with expectations), offset by growth in cash activity (cash brokerage up 29% QoQ and 23% beat on estimates) as well as commodity activity (commodity brokerage up 20% QoQ and 9% above estimates).
* Net brokerage income at INR5.2b grew 7% QoQ (in-line).
* Net interest income at INR2.7b grew 6% QoQ (in-line).
* Other income at INR961m grew 11% QoQ (11% beat on estimates), largely driven by 62% QoQ growth in distribution income.
* Total income at INR8.9b (+7% QoQ) was in line with our estimates.
* Total operating expenses grew 23% QoQ (in-line). CI ratio increased sequentially to 78.2% vs 68.2% in 4QFY25 (in-line), with employee expenses higher than our estimates and admin expenses in-line with our estimates.
* The beat in distribution income was offset by higher-than-expected employee expenses, leading to in-line PAT performance at INR1.1b (-34% QoQ).
F&O sees slight recovery; cash and commodity growth strong
* 1QFY26 witnessed slight rise in F&O activity after regulatory impact in 4QFY25, resulting in 5% sequential increase in F&O brokerage. Stable market environment and introduction of brokerage for cash delivery orders resulted in a 29% sequential growth in cash brokerage. Recent geopolitical conditions led to a spike in commodity activity, resulting in a 20% sequential growth in commodity brokerage.
* Average client funding book grew 4% QoQ to INR42.1b (INR40.3b in 4QFY25), resulting in a 6% sequential growth in net interest income to INR2.7b.
* Maintained SIP momentum and credit distribution of INR2.3b during the quarter (INR7b – cumulative as of Mar’25) resulted in a 63% sequential growth in distribution income.
Rise in employee expenses and IPL costs leads to elevated C/I ratio
* Total operating expenses grew 23% QoQ, driven by IPL costs of INR1,117m during the quarter and 47% sequential growth in employee expenses. On a sequential basis, the CI ratio increased to 78.2% in 1QFY26 from 68.2% in 4QFY25.
* Employee costs included ESOP costs of INR465m (+38% QoQ) and employee benefit expenses of INR2,274m (+49% QoQ).
* Admin and other expenses grew 12% QoQ to INR4.2b, owing to IPL costs, while CAC declined sequentially, aligned with a decline in client additions.
Order run rate improves as F&O activity recovers
* ADTO stood at INR35.9t, up 12% QoQ. The total number of orders grew to 343m in 1QFY26 from 327m in 4QFY25.
* 4QFY25 witnessed a new base after F&O regulation impact, post which F&O orders grew 5% QoQ in 1QFY26 to 241m. Revenue per order increased slightly to INR21.3 (INR21.2 in 4QFY25).
* Stable market environment led to flattish performance for cash orders at 75m. Sequentially, revenue per order increased to INR15.2, driven by the introduction of brokerage in cash delivery segment.
* Commodity orders grew 23% sequentially to 27m.
Valuation and view
In 1QFY26, the industry witnessed slight recovery after the regulatory impact on F&O, supported by a stable market environment and cash delivery brokerage, which contributed to ANGELONE’s top line growth. However, elevated employee expenses and increased IPL spends weighed on its bottom line. The new business of loan distribution gained strong traction during the quarter. Other new businesses such as distribution of fixed deposits, wealth management, and AMC are likely to gain traction over the medium term. We may review our estimates after the earnings call on 17th Jul’25.
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