ANGELONE - ANGEL ONE LIMITED Share Price

Management expressed confidence in overcoming near-term challenges from F&O regulations and market volatility, viewing regulatory changes as constructive for long-term sustainability. They anticipate normalization by Q4 FY26, with operational metrics rebounding as macroeconomic conditions stabilize. Key strategies include:

1. Growth Investments: Continued focus on client acquisition, tech upgrades (AI/ML for personalization, risk profiling), and expanding into credit, insurance, wealth management, and passive investing.
2. Market Leadership: Sustained demat account growth (16.1% market share) and active client retention (15.4% NSE share), with Tier 2/3 cities driving 88% of new clients.
3. New Verticals:
   • AMC: Launched passive funds (Rs.740 Cr AUM across 8,800 pin codes).
   • Wealth Management: Ionic Wealth reached Rs.3,790 Cr AUM, focusing on HNIs and omnichannel engagement.
   • Credit & Insurance: Partnered with 6 lenders and 5 insurers; disbursed Rs.7,000 Cr in loans.
4. Financial Resilience: Margins (31.8% in Q4) impacted by IPL spends and variable pay reversals but expect recovery. Declared Rs.26/share dividend.
5. Leadership Additions: Ambarish Kenghe (Group CEO) and Rohit Chatter (Chief Data Officer) to drive tech innovation and AI adoption.

Outlook: Near-term softness in H1 FY26, but long-term optimism driven by India's structural growth, digital adoption, and diversified revenue streams beyond broking.

Question 1:
Swarnabha Mukherjee (B&K Securities):
"First one, I wanted to have a better understanding on the expense head for the quarter and how we should look about it for FY '26 in particular, in terms of the reversal of the variable pay, what was the rationale for the same, and then when we move ahead in FY '26 [...] how should those numbers look [...]? [...] With lower customer acquisition, the opex levels still continue to remain steady. So has the cost of acquiring new customers gone up? [...] what would be the reason why this particular cohort is more impacted [...]?"

Answer:
Variable pay reversals occurred due to missed FY25 targets from regulatory/macro impacts. FY26 expenses will follow similar variable/fixed structures. Customer acquisition costs (CAC) rose temporarily in Q4 but are normalizing via channel mix adjustments. Cohort revenue impacts reflect cyclical market conditions, not structural issues, with breakeven periods expected to stabilize as markets recover.

Question 2:
Prayesh Jain (Motilal Oswal):
"[...] what kind of trajectory should we think about EBITDA margins from FY '26? [...] Could you split [wealth AUM] as to how much is transactional? [...] What is the kind of revenue potential [...]? [...] What is the kind of AUM size [...] in MF [...]? Why [loan distribution] decline? [...]?"

Answer:
EBITDA margins are expected to recover to 40-45% by Q4 FY26 as market conditions normalize. Wealth AUM (Rs.3,790 crore) includes ~75% recurring income (advisory/trail) and ~25% transactional. Loan distribution softened due to cautious lender underwriting but is rebounding with new partnerships and AI-driven risk models.

Question 3:
Pradyumna Choudhary (JM Financial):
"[...] F&O market share [...] slight moderation [...] How should we look at this [...]? [...] commodity [...] declining market share [...] activation rate [...] continuously declined [...]?"

Answer:
F&O market share dipped due to retail client reset post-regulation but is stabilizing. Commodity declines reflect mix shifts (e.g., lower crude oil turnover), not market share loss. Activation rate trends reflect cyclical market activity, not customer quality; acquired clients remain long-term assets.

Question 4:
Karan (Jetha Global):
"[...] grade Angel One's tech stack [...]? [...] multi-product customers [...] how are you underwriting CAC [...]?"

Answer:
Tech stack is rated highly (8-9/10) for scalability and innovation, with AI/ML investments enhancing personalization. CAC is justified by broking revenue alone but will optimize further as multi-product adoption (credit, insurance, wealth) increases customer lifetime value (LTV).

Question 5:
Abhijeet Sakhare (Kotak Securities):
"[...] customer behavior post-regulations [...] competitive intensity [...] CEO's strategic focus [...]?"

Answer:
Post-regulation cohorts show similar activation trends; competitive intensity remains low as Angel gains share. CEO Ambarish Kenghe prioritizes AI integration, product diversification, and unified client journeys to drive scalability and engagement.

Question 6:
Nidhesh Jain (Investec):
"[...] possibility of price hike [...]? [...] entering payments/credit cards [...]?"

Answer:
Price hikes are deferred until market behavior stabilizes (~2 quarters). Focus remains on distributing third-party products (credit, insurance, MF); payments/cards are not immediate priorities.

Question 7:
Sanketh Godha (Avendus Spark):
"[...] order recovery [...]? [...] margin levers [...]?"

Answer:
Daily orders (5.4M in March) are recovering; FY26 exit targets align with pre-regulation levels (6.9M). Margins will rebound via operating leverage, lower CAC, and reduced new-business burn, aiming for 40-45% by Q4 FY26.

Question 8:
Bhuvnesh Garg (Magma Ventures):
"[...] ESOP cost [...]? Gross broking revenue per order [...] flat [...]?"

Answer:
ESOP costs (Rs.35"“38 crore/quarter in FY25) will rise in FY26 with new grants. Flat revenue/order reflects mix shifts (lower F&O, higher cash/commodities), offsetting delivery-order pricing.

Question 9:
Ajay Nandanwar (Blue Argon Capital):
"[...] competitive advantage in distribution [...]?"

Answer:
Angel's edge lies in high customer engagement, data-driven personalization, and cross-selling via its unified platform, enabling efficient distribution of credit, insurance, and wealth products.