Angel One Ltd. shares will be in focus on Thursday after Citi reaffirmed its buy rating on the stock and maintained a target price of Rs 380 per share, implying an upside of about 10.5% from Wednesday's closing price of Rs 344.
The brokerage retained its positive stance after Angel One's June-quarter results, saying the company delivered higher profitability, expanded margins and maintained stable market share despite investing in its wealth management and distribution business.
Citi said Angel One reported a 75% year-on-year rise in core profit before tax (PBT) during the first quarter. On a sequential basis, core PBT increased about 3% after adjusting for Indian Premier League-related expenditure.
The brokerage also noted that Angel One gained a marginal share in retail derivatives turnover from the previous quarter, while its share in the cash segment remained broadly unchanged.
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Margin Expansion Backed By Cost Discipline
Citi said Angel One's calculated adjusted earnings before depreciation, amortisation and tax (EBDAT) margin expanded 785 basis points year-on-year to 31.9%.
"The company's ability to contain overheads despite expanding its wealth management and distribution franchise is encouraging," Citi said.
According to the brokerage, employee expenses, excluding employee stock option costs, and overheads, excluding IPL-related expenditure, rose only 5% from a year earlier. It added that continued cost discipline could provide further scope for margin expansion.
Angel One's average client funding book increased 5% quarter-on-quarter. Citi also pointed out that the closing funding book was 16% higher than the quarterly average, indicating stronger momentum towards the end of the June quarter.
Key Risks And Triggers
Citi said equity market volatility could weigh on trading volumes, while slower customer additions and regulatory changes could affect the broking industry.
The brokerage added that intense competition could lead to higher costs or weaker client retention, while slower execution of Angel One's wealth management strategy could pressure its valuation.
On the upside, Citi said stronger-than-expected broking volumes and faster improvement in the cross-sell ratio could lift earnings beyond its current estimates.
The brokerage said it would review its estimates after Angel One's earnings call scheduled for 11 a.m. on July 16, 2026.
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