Angel One — Q4 FY25 earnings call

Call held 17 Apr 2025

Management summary

Angel One reported a challenging Q4 FY25, with sequential declines in revenue and profit, primarily due to F&O regulation changes and softer market conditions. Despite this, the company continued to grow its client base and market share, with strong performance in new business verticals like credit distribution and wealth management. Management expressed confidence in a return to normalized margins by the exit of Q4 FY26, driven by strategic investments in technology and diversification.

Highlights

  • Q4 FY25 gross revenues declined 16.3% sequentially, and net revenues declined 15.7% sequentially.

  • Consolidated PAT for Q4 FY25 declined 38% sequentially to ₹1.7 billion.

  • Full-year FY25 gross revenues grew 22.6% YoY to ₹52.5 billion, while PAT grew 4% YoY to ₹11.7 billion.

  • Consolidated operating margin for Q4 FY25 was 31.8%, a sequential decrease of 1,019 basis points.

  • The company acquired 1.6 million clients in Q4, with 88% from Tier 2/3 cities.

  • Market share in demat accounts increased by 19 bps to 16.1%, and incremental demat accounts by 50 bps to 21%.

  • Ionic Wealth (wealth management) now manages over ₹3,790 crores in AUM.

  • The board approved a final dividend of ₹26 per share.

Concerns

  • F&O Regulation Impact

  • Softer Market Conditions

Key financials

3 periods

Headline

  • Net Worth (Mar 31, 2025)
    ₹56,400 Cr

Q4

  • Gross Revenue
    —
    QoQ -16.3%
  • Net Revenue
    —
    QoQ -15.7%
  • PAT
    ₹1,700 Cr
    QoQ -38%
  • Operating Margin
    31.8%
    QoQ -10.2%
  • Client Funding Book
    ₹40,300 Cr

FY25

  • Gross Revenue
    ₹52,500 Cr
    YoY +22.6%
  • PAT
    ₹11,700 Cr
    YoY +4%
  • ROE
    27%

What they filed

Q1 FY27: revenue up 25.3%, net profit up 102.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,515 1,262 1,056 1,141 1,202 −21%1,335 +6%1,459 +38%1,430 +25%
EBITDA672 496 343 275 415 −38%529 +7%599 +75%485 +76%
Net profit423 281 175 114 212 −50%269 −4%320 +83%231 +103%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Gross Broking Revenue (Q4)
    77% F&O Share14% Cash Share8.6% Commodity Share
  • Net Broking Revenue (Q4)
    76% Direct Business Share23% Assisted Business Share
  • New Businesses (Q4)
    3% Share of Total Gross Revenue
  • Ionic Wealth AUM
    ₹3,790 Cr Total AUM₹3,327 Cr Actively Managed Assets₹463 Cr Custody Assets
  • Mutual Fund AUM (AP Channel)
    ₹3,700 Cr Total AUM

Capital allocation

high confidence
  • Dividend ₹26/share (final)
    I'm also pleased to inform you that in line with our policy, the Board has approved a final dividend of 26 per share of the consolidated annual profit of the company.
  • Liquidity Liquidity disclosed Period-end cash and cash equivalents were higher on account of marginally higher client monies, coupled with our own cash generated during the course of the year. Client funding book soared by 2.2x to 38.6 billion, funded through QIP proceeds, own cash, and borrowings, leading to a 1.3x increase in period-end borrowings.
    Period-end cash and cash equivalents were higher on account of marginally higher client monies, coupled with our own cash generated during the course of the year. Correspondingly, some of our of this positive cash flow generated is also reflected in investments. Post our QIP last year, our client funding book soared by 2.2x to 38.6 billion. This growth was funded through a mix of the QIP proceeds, our own cash generated and borrowings, which led to a 1.3x increase in our period-end borrowings.

Guidance & targets

Profitability

  • Operating Margin Profitability · by exit of Q4 FY26 · High confidence 40-45%
    We can say 40%, 45% by exit of quarter 4, and it will expand as we move to the next financial year.

    — Dinesh Thakkar

  • ROE Profitability · by exit of Q4 FY26 · Medium confidence historical levels
    ROE should trend back to its historical levels.

    — Dinesh Thakkar

Business Growth

  • New Business Sizing (Credit/Insurance) Business Growth · next 3 to 5 years · Medium confidence very sizable business
    I think both these areas, be it insurance or credit, we are very bullish that they can become very sizable business over the next 3 to 5 years.

    — Saurabh Agarwal

Credit Distribution

  • PL Annual Offtake (Market) Credit Distribution · next 4-5 years · High confidence ₹20 lakh crores
    So over the next 4 years, 4 to 5 years, we might look at close to a 20 lakh crores annual offtake in PL in India, right?

    — Saurabh Agarwal

  • PL Annual Offtake (Angel One) Credit Distribution · next 4-5 years · High confidence ₹20,000 crores (1% market share)
    Even if we look at, say, a 1% market share, that is 20,000 crores of PL being distributed.

    — Saurabh Agarwal

What to watch in Q1 FY26

Consolidated Operating Margin

by exit of Q4 FY26
Current 31.8% (Q4 FY25)
Target 40-45%

Why it matters

Key profitability metric, management expects significant recovery after Q1 FY26.

We can say 40%, 45% by exit of quarter 4, and it will expand as we move to the next financial year.

Risks & concerns

  • F&O Regulation Impact

    high

    F&O regulation led to immediate decline in volume, reduced active client participation, and muted order activity in Q4 FY25.

    Management acknowledged

  • Softer Market Conditions

    high

    Impacted Q4 results and led to cautious underwriting in credit, but expected to improve.

    Management acknowledged

  • Volatile Geopolitical Backdrop

    medium

    Impacting buoyancy in the markets.

    Management acknowledged

  • IPL Spends Impact on Q1 FY26 Margin

    medium

    Higher IPL spends in Q1 FY26 will seasonally impact operating margin.

    Management acknowledged

Q&A highlights

6 direct
Expense Head & Variable Pay Reversal Direct
If we missed that this time because of regulatory changes and all that, we were unable to reach our targets, so definitely, there is a reversal of variable cost. But going forward, always this is the practice, we do some projection based on that, we work out fixed and variable pay. So for coming year also, same system would be followed.

Clarifies the reason for the Q4 expense reduction and sets expectations for higher employee costs in FY26, impacting profitability.

Asked by Swarnabha Mukherjee

Customer Acquisition Cost (CAC) & Quality Direct
the cost of acquisition had gone up in JFM across the industry, driven by a couple of channels and correspondingly, it also went up for us. But our acquisition mix is based on a multiple set of channels, and we have corrected for that mix. And we are very confident that the COAs will come down as we go forward, and we are already seeing the reduction as we get into April.

Addresses concerns about rising acquisition costs and management's strategy to optimize it, crucial for unit economics.

Asked by Swarnabha Mukherjee

Cohort Level Revenue Impact Partial
FY '25 has been an extraordinary year for reasons that we all know. And if you observe carefully, you will see that almost for all cohorts, there has been an impact. With respect to FY '23, in particular, that you mentioned, well, this is just the start of a cohort of customers, which has to be allowed some time to stay on the platform for them to start generating revenue.

Provides context on how to interpret cohort data, suggesting that short-term impacts might not reflect long-term value.

Asked by Swarnabha Mukherjee

New Business Contribution to Revenue Direct
So the new businesses, including asset management, wealth and distribution, they are clubbed under distribution. The 3% revenue that we have disclosed as a constituent of the total revenue, it's included there.

Quantifies the current impact of diversification efforts, which is a key strategic pillar.

Asked by Swarnabha Mukherjee

F&O Market Share & Commodity Market Share Direct
From an F&O market share point of view, we see a slight change. From an overall trajectory point of view, we are seeing incremental market share gain. We are seeing a temporary dip with that F&O regulation changes coming in, which is affecting the retail client segment, particularly harder, where we have a very strong market share... From a commodities point of view, I think it's more of a composition mix of the commodities market, where traditionally, we have a very strong market share in crude oil. And what lately has happened as the composition of the market is changing and crude oil turnover contribution in commodities has gone down, this is what is reflective. We have not really lost any market share.

Explains market share dynamics in core broking segments, linking it to regulatory and market composition shifts.

Asked by Pradyumna Choudhary

Activation Rate Decline Partial
What happens we need to have a particular base. From that base, a certain amount of customer becomes active. It is not that the person becomes active, they only remain active. As you rightly said, in bull market, bear market, you will see different kind of customers becoming active of the base.

Addresses a potential red flag regarding client engagement and conversion, providing management's perspective on long-term value.

Asked by Pradyumna Choudhary

New CEO's Assessment of Tech Stack & Multi-Product Strategy Direct
I'm actually very pleased with the shape of the tech stack at Angel One across the board and across products that you see... The tech stack is in phenomenal shape, is able to handle a large amount of volume, a large amount of features and keep up with all the compliances as well. ...how do we bring all of these things together and make it better for the customer and create a fantastic place for financial services platform for people to come in there. So that's a very important part of it.

Provides insight into the new CEO's strategic priorities and confidence in the company's technological foundation for future growth.

Asked by Karan

Price Hike Possibility Direct
But till the time it is not necessary for us to look into prices, we would like to maintain this price... So initial kind of signs what I'm saying in terms of, as I said, that revenue curve has almost bottomed out, and we are seeing revenue kind of like improving since March. So we would like to monitor this situation for 2 quarters before we take a stand on price.

Indicates management's pricing strategy and their confidence in achieving margin targets through other means, which is critical for revenue stability.

Asked by Nidhesh Jain

2 min read 8 chapters

Detailed narrative

Q4 FY25 Financial Performance Overview

Angel One reported a challenging Q4 FY25, with gross revenues declining 16.3% sequentially and net revenues down 15.7%. Consolidated PAT saw a significant 38% sequential drop to ₹1.7 billion. The operating margin contracted by 1,019 basis points QoQ to 31.8%. For the full year FY25, gross revenues grew 22.6% YoY to ₹52.5 billion, while PAT increased 4% YoY to ₹11.7 billion.

Impact of Regulatory Changes and Market Conditions

Management noted that Q4 FY25 was the first full quarter post-implementation of index derivative regulations, coupled with softer market conditions. This led to a 22.6% sequential decline in gross broking revenue to ₹6.3 billion. The share of F&O in gross broking income reduced to approximately 77% from a previous range of 81-87%, while cash and commodity segments increased to 14% and 8.6% respectively.

Client Acquisition and Market Share Growth

Despite market headwinds, Angel One acquired 1.6 million clients in Q4, with 88% originating from Tier 2, Tier 3, and beyond cities. The company increased its market share in demat accounts by 19 basis points to 16.1% and in incremental demat accounts by 50 basis points to 21%. Market share in active clients and retail equity turnover remained steady at 15.4% and 19.9% respectively.

Diversification into New Business Verticals

Angel One is actively building out its financial services platform beyond broking. In credit distribution, the company added 3 new lenders (2 banks, 1 fintech) and has cumulatively disbursed over ₹7 billion as of March 2025. Ionic Wealth, its wealth management arm, now manages over ₹3,790 crores in assets under management. The new businesses collectively contributed approximately 3% to total gross revenues in Q4 FY25.

Strategic Investments in Technology and AI

The company is investing significantly in advanced analytics, artificial intelligence, and machine learning to enhance the digital experience, curate personalized client journeys, and improve risk profiling. The new Group CEO, Ambarish Kenghe, emphasized the strong tech stack and the ongoing commitment to leverage AI for product development, operational efficiency, and deeper customer engagement.

Cost Structure and Profitability Outlook

Employee benefit expenses decreased 21.3% sequentially due to ₹641 million in variable pay reversals, though ESOP costs increased due to new grants. Other operating expenses rose 13.6% sequentially, including ₹344 million for IPL associate partnership sponsorship. Management expects operating margins to return to 40-45% by the exit of Q4 FY26, despite short-term impacts from IPL spends in Q1 FY26.

Asset Management Business Launch

Angel One successfully launched its maiden new fund offering, introducing two flagship products: the Angel One Nifty Total Market Index Fund and Angel One Nifty Total Market ETF (India's first ETF tracking this index). They also launched their first debt offering, Angel One Nifty 1D Rate Liquid ETF Growth. These products garnered ₹740 million in AUM across 8,800 PIN codes in a short period.

Dividend Declaration

The Board of Directors approved a final dividend of ₹26 per share for the consolidated annual profit of the company, reflecting their commitment to shareholder returns.

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