Angel One shares rally 5% on announcing Rs 26 dividend despite Q4 profit slump. Here's what brokerages say
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Shares of Angel One climbed as much as 5.4% on Monday to Rs 2,483.75 on the BSE after the stockbroker firm announced a final dividend of Rs 26 per share for FY25, despite posting a sharp decline in quarterly profit and revenue.The broking firm's consolidated net profit for the January–March quarter fell 48.7% year-on-year to Rs 174.5 crore, while revenue declined 22.2% to Rs 1,056 crore. Operating margins also contracted to 32.5% from 39% in the same period a year ago, with EBITDA dropping 35.3% to Rs 342.8 crore.ICICI Securities downgraded the stock to "Add" from "Buy" and cut its target price to Rs 2,500 from Rs 3,000, citing an expected earnings trough in the first half of FY26 due to weak market conditions and regulatory headwinds. The revised target implies a potential upside of about 0.7% from Monday's high.The brokerage said it expects a rebound in Angel One's earnings with a projected PAT of Rs 8.3 billion in FY26, and Rs 12.5 billion in FY27. Over the longer term, ICICI Securities sees potential for significant recovery, projecting a PAT of Rs 15 billion by FY27E.HDFC Securities, however, maintained a 'Buy' rating and set a target price of Rs 2,850, implying a potential upside of nearly 15% from current levels. 'Net revenue and PAT collapsed 31% and 60% versus Q2 FY25, while high acquisition costs and IPL-related spends also took a toll,' HDFC Securities said in a research note. 'We believe F&O activity has now stabilised and is likely to start improving on a sequential basis.'Angel One's Q4 performance reflected the full impact of regulatory changes in the equity derivatives segment, with average daily orders declining to 5.3 million from a peak of 8.8 million in June 2024. F&O orders dropped 25.6% quarter-on-quarter, according to ICICI Securities.The company also reported a 5.5% sequential drop in its margin trading funding (MTF) book to Rs 38.5 billion and a 10.2% fall in total borrowings to Rs 33.8 billion. Interest income declined 3.3% quarter-on-quarter to Rs 3.4 billion.Despite the weak quarter, Angel One's leadership highlighted strong annual performance. Chairman and Managing Director Dinesh Thakkar said FY25 was a 'transformative year,' while Group CEO Ambarish Kenghe noted the company achieved record client additions and its highest-ever annual profit.Angel One's board has recommended the Rs 26 per share final dividend, to be paid within 30 days of the Annual General Meeting. The stock remains down 29% from its 52-week high of Rs 3,502.60 hit in December.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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