Angel One - Diversification Is The Next Mantra: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Angel One Ltd. stock price is down 38% year-to-date as the markets were anticipating regulatory actions on F&O segment. The consultation paper has cleared up the uncertainty. With regards to true-to-label charges, the company has highlighted that various levers will be used to fully offset the impact on revenues and margins.For every 10% hit in true-to-label charges, earnings are hit by ~4%, and for every 10% hit in the number of orders, earnings are hit by ~12%. On the other hand, an Rs 2 per order increase in realizations can increase earnings by ~10%.While pricing action on various aspects of the business can have an offsetting impact, optimising the cost is another lever. In the past, the company has slowed down customer acquisitions to keep costs under control intermittently.Furthermore, in our estimates, we have not built in additional revenues from new products (fixed income and loan distribution) and new businesses (Wealth management, AMC, new push on associated persons). However, the incremental costs for these businesses are built into our estimates.We are not changing our estimates yet as we await the final regulations. However, we cut our FY26E P/E multiple to 14 times to arrive at a one-year target price of Rs 3,000. Maintain Buy..Signature Global - Growth Gem In Making; Motilal Oswal Initiates Coverage With A Buy.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Angel One - Diversification Is The Next Mantra: Motilal Oswal

Regulatory changes customer-centric, the company has levers to offset the impact, says the brokerage and maintains Buy rating.

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