Earnings Call Transcript Analysis Report #
Angel One Q4 FY25 Earnings Call Analysis #
Financial Performance #
Key Metrics: #
- Orders: Declined 22.4% sequentially to 327 million in Q4 FY25. Average daily orders improved in March (5.4M) but full-year FY25 average was 6.9M.
- Revenue: Q4 Gross Revenue down 16.3% seq; Net Revenue down 15.7% seq. FY25 Gross Revenue ₹52.5B (+22.6% YoY).
- Profitability: Q4 PAT ₹1.7B (-38% seq). FY25 PAT ₹11.7B (+4% YoY).
- Margins: Q4 Operating Margin 31.8% (-1019 bps seq). This includes ~1.8% impact from incubating new businesses (Asset Management & Wealth Management, net burn ~₹62-63 Cr in Q4).
- Return Ratios: FY25 ROE contracted to 27%.
- Broking Revenue: Q4 Gross Broking Revenue ₹6.3B (-22.6% seq), approx. 60% of total. F&O contribution reduced to ~77% (down from 81-87% range historically). Cash & Commodity share increased to 14% & 8.6% respectively. Gross broking revenue per order was flat QoQ despite full quarter impact of delivery charges.
- Interest Income: Q4 Gross Interest Income ₹3.4B (-3.4% seq), ~32% of total gross revenue. Client funding book steady at ₹40.3B avg; interest rate reduced to 14.99% mid-Nov 2024.
- Distribution Income: Grew 4.6% seq to ₹314M (3% of total gross revenue), driven by insurance products. Includes revenue from AMC & Wealth.
Costs: #
- Finance Cost: ₹803M (-3.9% seq).
- Employee Expenses: ₹1.9B (-21.3% seq) due to ₹641M variable pay reversal. ESOP cost higher due to new grants (FY25 ESOP cost ~₹105 Cr, Q4 ~₹35-38 Cr).
- Other Operating Expenses: ₹3.8B (+13.6% seq) includes ₹344M IPL sponsorship spend.
Comparisons: #
Performance significantly impacted sequentially due to regulatory changes and market softness affecting volumes and activity. FY25 showed YoY growth but profitability growth moderated significantly compared to revenue growth, especially in H2.
Guidance/Forecasts: #
- Management anticipates Q4 FY26 as a “normalized quarter.”
- Expects operating margins to return towards 40-45% by the exit of Q4 FY26.
- ROE expected to trend back towards historical levels as business normalizes.
- Q1 FY26 margins expected to be impacted by seasonality (increments, variable pay provisioning) and higher IPL spend allocation.
Areas of Growth/Decline: #
Significant sequential decline in orders, broking revenue, and overall profitability. Distribution income showed modest growth. Full-year figures show growth, masking the H2 downturn. Client funding book remained steady.
Dividend: #
Final dividend of ₹26 per share declared for FY25.
Strategic Initiatives & Business Updates #
Major Announcements: #
Appointment of Ambarish Kenghe as Group CEO and Rohit Chatter as Chief Data Officer.
Strategy: #
Clear focus on building a comprehensive financial services platform/Super App beyond broking. Leveraging technology (AI/ML) for personalization, efficiency, and risk management (“AI-first organization”). Continued investment in growth despite short-term profit impact. Refined partner acquisition strategy (Assisted Business). Multi-channel approach for AMC, Omnichannel for Wealth.
New Products/Services: #
- AMC: Launched Angel One Nifty Total Market Index Fund, Angel One Nifty Total Market ETF (India’s first), Angel One Nifty 1D Rate Liquid ETF Growth.
Markets/Partnerships: #
- Credit: Added 3 lenders (2 Banks, 1 Fintech), total 6 partners. Onboarded 2 banks as clients.
- Insurance: Added 2 insurers, total 5 partners.
- Wealth Management (Ionic): Established presence in 9 key cities.
Operational Changes: #
Continued focus on Tier 2/3+ cities for client acquisition (88% in Q4). Branding enhanced via IPL partnership.
Project Updates: #
- Client Acquisition: 1.6M clients acquired in Q4.
- AMC: Reached ₹740M AUM across 3 products, presence in 8,800+ PIN codes.
- Wealth (Ionic): AUM ₹3,790 Cr (₹3,327 Cr active, ₹463 Cr custody), 680+ clients, 166 professionals (57 RMs). Focus on UHNW (>₹25 Cr) and HNI/WealthTech (₹1-25 Cr) segments. Traction in fractionalization and accreditation support.
- Credit: Cumulative disbursal >₹7B. Q4 disbursal ~₹100 Cr (down from ~₹240 Cr in Q3) due to lender caution. Building proprietary lender allocation engine and AI/ML risk models.
- Mutual Funds: 1.9M new SIPs in Q4 (softness aligned with market). AUM growing, platform stickiness noted. Assisted channel MF AUM ~₹3,700 Cr (grown 2.2x YoY).