After tepid listing in 2020, this broking firm now takes just a month to double your money

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Shares of Angel Broking, which made a tepid debut on bourses last year, have been buzzing on Dalal Street due to their robust performance in the past one month. The scrip has rallied almost 102% to Rs 737 on May 27 from Rs 366 on April 26. Earlier, shares of the stock broking firm got listed with a 10% discount in October 2020 and remained range bound till April 2021.

Latest financial results Of late, Angel Broking hogged the limelight after it posted 229% growth in consolidated net profit at Rs 101.91 crore for the quarter ended March 31. The total income of the company also jumped around 110% YoY to Rs 418.86 crore.

It seems that pandemic-led disruptions turned blessing in disguise for Angel Broking due to robust client additions in FY21. The bottom line of the company increased 260% to Rs 296.85 crore for the financial year ended March 31.

In an interaction with a television channel, Dinesh Thakkar, CMD, Angel Broking said, “We achieved the highest gross addition of around 0.96 million customers in March quarter. This was the highest of all the quarters in our history, a growth of almost 87% quarter-on-quarter. For the full year, we had around 2.4 million customers which are around 322% higher than last year. This is one of the best achievement of the year. Our share in demat accounts stood at around 17.6%. We saw a good improvement in our market share.”

He further added that the ongoing momentum in the stockbroking industry will last for at least 5-10 years as the market penetration is very low in India.

Analyst view

Going with market experts, Angel Broking has successfully transformed into a digital broking platform operating in a flat-fee business model resulting in strong growth in revenues in FY21 and active clients with cost-efficiency. The successful transformation of the business model underlines the execution capability of the franchise in the retail broking space.

Brokerage ICICI Securities has initiated coverage on Angel Broking with a ‘Buy’ call and set a price target of Rs 900, indicating an upside of 20% from the current market price. “Full-scale digital platform and discount brokerage model has transformed the business of Angel Broking.”

In general, the brokerage industry is dependent on the capital markets, hence any general economic and market consolidation in India or globally can affect overall revenues. The benchmark BSE Sensex has gained over 90% from the lows of March 2020.