ANGELONE - ANGEL ONE LIMITED Share Price

Management conveyed a positive outlook for Angel One Limited, highlighting India's economic resilience and growth potential. They noted key factors aligning for multiyear expansion, such as a young population, digital adoption, and supportive government reforms.

Key forward-looking points include:

1. Market Growth: India's SIP inflows reached Rs.290 billion in September 2025, a significant rise from an average of Rs.85 billion five years ago. This trend indicates a robust growth in retail investment behavior.

2. Client Base Expansion: Angel One has grown its client base to over 34 million, with new client additions reaching 1.7 million this quarter, marking a 12.2% increase from the previous quarter.

3. Revenue Diversification: Revenue from new business verticals"”wealth management, insurance, and credit"”is expected to capture a growing share. The company is investing in partnerships and technology to enhance offerings. They have formed a joint venture with LivWell to introduce a digital life insurance product, with a planned stake of 26% in a Rs.4 billion venture.

4. Financial Stability: The company aims for operating margins to reach between 40%-45% by the end of FY '26. This target comes alongside an expected revenue growth of 20% from the current quarter to Q4.

5. Investment in Innovation: Management emphasized utilizing AI technologies to enhance customer experiences, evidenced by the launch of an AI-driven chatbot, which achieved over 80% query resolution without escalation.

6. Focus on Credit Growth: Credit disbursements grew to Rs.4.6 billion this quarter, a 97% increase sequentially, with a projected annual run rate of Rs.18 billion.

Overall, management expressed confidence in Angel One's positioning to leverage technological advancements and evolving market conditions for sustained growth in the financial services sector.

Q&A Section from Angel One's Earnings Transcript

Question 1: "On the cash segment, where we saw the realizations dip. What is the outlook for this segment?"

Answer: I appreciate your inquiry regarding the cash segment. The drop in realizations can be attributed to changes in the mix of cash products. We simplified our pricing structure to enhance consumer experience, reducing commission rates to 0.1%, capped at Rs.20 and a minimum of Rs.5. This aims to create transparency. Moving forward, we expect these changes to streamline revenue generation despite current volatility.

Question 2: "Can you provide a breakup of distribution income into credit, wealth management, and others?"

Answer: Currently, we do not break down distribution income by segments. The best way to track these businesses is by monitoring AUM and disbursals. Each vertical has its own growth trajectory, allowing for a diverse income stream in the coming years. We anticipate significant contributions as they mature.

Question 3: "Regarding operating profit margin guidance, can we expect it to remain around 40% for Q4?"

Answer: Yes, we reaffirm our guidance of achieving an operating profit margin of 40% to 45% by the end of Q4. We are closely monitoring market conditions and operational efficiencies to ensure we stay on track towards this target. Positive revenue growth and disciplined cost management will be crucial.

Question 4: "What are the burn rates for the new businesses and your expectations going forward?"

Answer: The burn rate for our two new businesses"”asset management and wealth management"”currently stands at about Rs.100 crore annually. We acknowledge that these ventures require substantial investment and time, but we believe they will yield positive returns in the long run.

Question 5: "How confident are you about increasing the orders per day to 6.8-6.9 million by Q4?"

Answer: Our recent data indicates we are on a solid growth trajectory. Despite macroeconomic headwinds, our monthly order run rates show progressive growth. We are committed to enhancing our service offerings, which we believe will drive order numbers upwards towards our projected target for Q4.

Question 6: "What are your plans for customer acquisition amid increasing costs?"

Answer: Customer acquisition costs have shown slight stability. Our approach includes balancing organic growth with paid acquisition strategies. We aim to optimize these expenses while focusing on attracting high-quality clients. We do not project drastic changes in acquisition rates but hope for sustained growth in client numbers.

Question 7: "Can you describe the life insurance joint venture and its model?"

Answer: Our 26% stake in the life insurance joint venture with LivWell allows us to leverage their product expertise while using our digital platform for distribution. Our goal is to co-create insurance products tailored to the Indian market, operating primarily through digital channels to enhance accessibility and user experience.

Question 8: "What is the expected AUM growth timeline for the new businesses?"

Answer: We anticipate the wealth management business to reach breakeven in about 2.5 to 3 years, with the asset management business requiring a longer horizon of 7 to 8 years due to its nature. We are building these businesses strategically, aiming for sustainable growth.

Question 9: "What is your view on the revenue mix from new businesses over the next few years?"

Answer: In the long term, we project our new businesses"”wealth management, distribution, and credit"”to contribute significantly to our revenue. We expect these sources to grow steadily, potentially providing us with double-digit contributions to our top line within 3 to 5 years, complementing the continued growth of our broking business.

These responses provide insights into Angel One's strategies, operational efficiency, and forward-looking goals within the rapidly evolving financial services landscape.