Angel One reported a 16% year-on-year rise in quarterly income to INR 10.9 billion, supported by credit distribution and robust IPO activity. Motilal Oswal has upgraded its earnings estimates for FY27 and FY28, citing improved operational efficiency and a 45.1% operating margin. The brokerage also set a price target of INR 380, monitoring how the firm adapts to changes in derivative trading regulations.
Angel One announced its financial results for the second quarter of fiscal year 2027, reporting total income of INR 10.9 billion. This marks a 16% increase compared to the same period last year and exceeded projections by 5%. The company's growth was primarily supported by its credit distribution services and high client participation in the primary market, coinciding with a period of active initial public offerings (IPOs).
A key focus for the company has been the management of costs, which contributed to better profitability. Operating expenses for the quarter fell by 3% year-on-year to INR 6 billion. As a result, the firm reported an operating profit margin of 45.1%, a significant improvement from the 34.5% margin recorded in the same quarter of the previous year. The standalone operating margins were reported at 48.9%, which reflects the company's ability to scale its operations efficiently.
Following these results, Motilal Oswal upgraded its earnings per share (EPS) estimates for fiscal years 2027 and 2028 by 6% and 4%, respectively. The brokerage noted that the firm is successfully navigating shifting market conditions, particularly as derivative trading volumes begin to stabilize following recent regulatory changes. To determine the target price of INR 380, the brokerage applied a 22x multiple to the projected earnings per share for fiscal year 2028, reflecting the expected trajectory in the consolidating financial services sector.
While the company showed strong performance in the latest quarter, investors may continue to monitor how the brokerage sector adjusts to stricter derivative trading rules implemented by regulators. These regulatory changes could impact overall trading volumes across the industry. For shareholders, the key monitorable will be the company's ability to maintain high client engagement and profit margins as the firm navigates these changes in market structure and increased competition in the financial services space.