Angel One Shares Drop 6% as Q4 FY25 Profit Falls 49% YoY

On April 17, 2025, shares of Angel One Ltd., one of India’s leading retail stockbroking firms, plummeted over 6% during intraday trading on the BSE and NSE, hitting an intraday low of ₹2,201. The sharp decline was triggered by the company’s disappointing Q4 FY25 (January–March 2025) financial results, which revealed a 48.7% year-on-year (YoY) drop in consolidated net profit to ₹174.5 crore from ₹339.9 crore in Q4 FY24. Consolidated revenue also fell 22.2% YoY to ₹1,056 crore from ₹1,357.3 crore, reflecting challenging market conditions and regulatory headwinds. This article provides a comprehensive analysis of Angel One’s Q4 FY25 performance, the factors behind the profit decline, the stock’s market reaction, the company’s strategic initiatives, and the broader implications for investors and India’s broking industry, aiming for approximately 2100 words.

Q4 FY25 Financial Performance: A Deep Dive

Angel One’s Q4 FY25 results painted a challenging picture, with significant declines across key financial metrics:

• Net Profit: Consolidated net profit tanked 48.7% YoY to ₹174.5 crore from ₹339.9 crore in Q4 FY24. On a quarter-on-quarter (Qoq) basis, profit after tax (PAT) fell 38% from ₹281.5 crore in Q3 FY25, highlighting a sharp sequential deterioration.
• Revenue from Operations: Total revenue from operations declined 22.2% YoY to ₹1,056 crore, down from ₹1,357.3 crore in Q4 FY24. Qoq, revenue dropped 16% from ₹1,263.8 crore in Q3 FY25, marking the lowest quarterly revenue growth in three years.
• EBITDA: Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) fell 44% YoY to ₹264.3 crore from ₹475.5 crore in Q4 FY24. Qoq, EBITDA declined 36% from ₹414.1 crore in Q3 FY25. EBITDA margins contracted to 32.5% in Q4 FY25, down from 39% in Q4 FY24 and 39.3% in Q3 FY25, reflecting increased cost pressures and lower revenue.
• Net Broking Revenue: A critical revenue stream, net broking revenue, sank 28% YoY to ₹490.6 crore from ₹685.6 crore in Q4 FY24, driven by reduced trading volumes and regulatory changes impacting futures and options (F&O) trading.

• Expenses: Total expenses rose, with the company citing higher operational costs, including spending on IPL-related marketing campaigns, which further eroded profitability. Employee costs accounted for 13.03% of operating revenues, while interest expenses were 3.18% for FY24, adding to the cost burden.
• Dividend: Despite the weak financial performance, Angel One’s board approved a final dividend of ₹26 per share for FY25, signalling confidence in its long-term cash flow generation. The dividend, if approved at the Annual General Meeting (AGM), will be paid within 30 days.

The stock’s 6% intraday plunge was moderated by the close, ending flat at ₹2,356.05 on the BSE, as some investors viewed the sell-off as an overreaction. However, the sharp decline in profitability and revenue spooked the market, raising concerns about the sustainability of Angel One’s growth trajectory.

Factors Behind the Profit Plunge

Several factors contributed to Angel One’s disappointing Q4 FY25 performance:

1. Regulatory Headwinds in F&O Trading: The implementation of stricter SEBI regulations on futures and options (F&O) trading significantly impacted Angel One’s broking revenue. These regulations, aimed at curbing speculative trading, reduced retail trading volumes, particularly in the high-margin F&O segment, which forms a substantial portion of Angel One’s income. Dinesh Thakkar, Chairman and Managing Director, highlighted these regulatory changes as a key headwind in FY25.
2. Weak Market Sentiment: Volatile geopolitical conditions and subdued equity market performance in Q4 FY25 dampened retail investor participation. The Nifty 50 index fell 0.23% on April 17, reflecting broader market weakness. Lower trading activity directly impacted Angel One’s brokerage income.
3. Decline in Client Acquisition: While Angel One’s total client base grew 39.5% YoY to 3.1 crore, gross client acquisition fell sharply by 43.9% YoY to 16 lakh in Q4 FY25, down from higher levels in previous quarters. Sequentially, client additions dropped 22.4%, indicating a slowdown in new customer onboarding.
4. Increased Cost Structure: Elevated operational expenses, including IPL-related marketing and technology investments, weighed on profitability. The company’s focus on expanding its wealth management and credit distribution businesses also led to higher upfront costs, which were not offset by revenue growth in Q4.
5. Lower Trading Volumes: The number of orders processed declined to 327 million in Q4 FY25 from 471 million in Q4 FY24, a 30.6% YoY drop. This reduction in trading activity, coupled with a 17.3% YoY fall in average daily turnover (ADTO), further pressured revenue.

Raj Gaikar, Research Analyst at SAMCO Securities, noted that the decline in profitability was primarily driven by weak market sentiment and lower retail trading volumes, exacerbated by regulatory changes.

Market Reaction and Stock Performance

Angel One’s stock opened at ₹2,200 on April 17, 2025, down significantly from its previous close of ₹2,285.40, and hit an intraday low of ₹2,201, reflecting a 6.78% decline. By 11:10 AM, the stock had trimmed losses, trading at ₹2,273.9 on the NSE, down 3.4%. By the close, it ended flat at ₹2,356.05 on the BSE, suggesting some bargain buying at lower levels.

The stock’s year-to-date (YTD) performance has been lacklustre, with a 25% decline in 2025 compared to a modest 1.46% drop in the Nifty 50 index. Over the past 12 months, the stock has fallen 18.27%, underperforming its peers in the financial services sector. Its market capitalisation stood at ₹20,495.84 crore on April 17, ranking it 20th in the financial services sector.

The stock’s high price-to-earnings (P/E) ratio of 15.42 and price-to-book (P/B) ratio of 6.32 indicate that it is trading at a premium, which may limit upside if earnings growth remains under pressure. However, the ₹26 per share final dividend, translating to a 0.94% yield, provides some support for income-focused investors.

Analyst Sentiment and Outlook

Analyst reactions to Angel One’s Q4 FY25 results were mixed, with some expressing caution and others remaining optimistic about its long-term prospects:

• Motilal Oswal Financial Services noted that Angel One’s revenue was impacted by F&O regulations and a weak market environment, while profitability was hit by an elevated cost structure and IPL spending. However, they highlighted the company’s ability to recover revenue through corrective pricing strategies.
• Kotak Institutional Equities maintained a ‘Buy’ rating with a target price of ₹2,800, anticipating a 20% earnings CAGR over FY27–28 despite a projected decline in FY26. They cited Angel One’s strong execution track record and reasonable valuations.
• Religare Broking suggested that the stock, trading near its medium-term moving average (100 DEMA), could see a rebound if it breaks above ₹3,060, potentially targeting ₹3,200+.

The consensus target price from eight analysts is ₹2,733.12, implying a 17.89% upside from the current price of ₹2,352.6. Despite the Q4 setback, analysts remain positive due to Angel One’s strong client base, digital-first approach, and diversification efforts.

Strategic Initiatives and Client Metrics

Despite the financial challenges, Angel One achieved notable growth in client metrics and outlined strategic plans to navigate the tough environment:

• Client Base Expansion: The company’s total client base surged 39.5% YoY to 3.1 crore, with its share in India’s demat accounts rising by 143 basis points to 16.1%. This growth reflects Angel One’s appeal among young, first-time investors, with 90% of its clients aged below 30 and 85% from Tier-II, III, and IV cities.
• Diversification Efforts: Angel One is expanding into wealth management, credit distribution, and mutual fund distribution to reduce reliance on volatile F&O revenue. As of Q4 FY25, the company derived 60% of its revenue from gross broking, 32% from interest, 4% from depository services, 3% from distribution, and 1% from other income. Its mutual fund AUM stood at ₹37.9 billion, and its Asset Under Custody was ₹1.2 trillion.
• Technology Investments: The company plans to deploy AI technologies to enhance client experience and operational efficiency, aiming to maintain its competitive edge in a digital-first broking landscape.
• Dividend Commitment: The approval of a ₹26 per share final dividend, following an interim dividend of ₹11 per share on March 20, 2025, underscores Angel One’s focus on shareholder returns despite short-term challenges.

Dinesh Thakkar, CMD, acknowledged the transformative nature of FY25, citing regulatory and geopolitical challenges, but expressed optimism about the company’s ability to adapt through innovation and diversification.

Industry Context: Challenges in the Broking Sector

The Indian broking industry faced significant headwinds in FY25, driven by regulatory changes and market volatility. SEBI’s stricter F&O regulations, introduced to protect retail investors from speculative losses, reduced trading volumes, impacting discount brokers like Angel One, which rely heavily on F&O transactions. The industry also faced competition from unlisted players like Zerodha and Groww, which have gained market share through low-cost offerings.

Despite these challenges, the industry continues to benefit from rising financialization in India. The total demat account base crossed 15 crore in FY25, with retail participation growing, particularly in smaller cities. Angel One’s focus on young, first-time investors from Tier-II and beyond positions it to capture this growth, though it must navigate regulatory and competitive pressures.

Challenges Facing Angel One

Angel One faces several challenges that could impact its recovery:

1. Regulatory Pressures: Ongoing SEBI regulations on F&O trading and potential future restrictions could continue to pressure broking revenue.
2. Volatile Trading Volumes: Dependence on volatile F&O and equity trading makes Angel One vulnerable to market downturns and reduced retail participation.
3. High Cost Structure: Elevated marketing and technology expenses, including IPL spending, have eroded margins, requiring better cost management.
4. Competition: Intense competition from Zerodha, Groww, and traditional brokers like ICICI Securities could limit market share gains.
5. Client Acquisition Slowdown: The 43.9% YoY drop in gross client acquisition signals challenges in sustaining growth momentum, particularly in a competitive market.

Opportunities for Recovery

Despite the Q4 setback, Angel One has several opportunities to drive growth:

1. Diversification into Wealth Management: Expanding into wealth management and mutual fund distribution can provide stable, recurring revenue streams, reducing reliance on volatile broking income.
2. Technology Leadership: Investments in AI and digital platforms can enhance client experience and operational efficiency, helping Angel One maintain its edge in a crowded market.
3. Growing Retail Participation: India’s low demat penetration offers significant growth potential, particularly in smaller cities, where Angel One has a strong presence.
4. Pricing Adjustments: Corrective pricing strategies, as noted by Motilal Oswal, could help recover revenue and protect profitability.
5. Export-Like Opportunities: While not directly applicable, Angel One’s digital-first model could inspire innovative offerings to attract global investors or NRIS, expanding its market reach.

Implications for Investors

The 6% stock plunge reflects investor disappointment with Angel One’s Q4 FY25 results, but the flat close suggests some optimism about its long-term potential. The stock’s 25% YTD decline and 18.27% drop over the past year indicate it is trading at a relatively attractive valuation compared to its historical highs. The consensus target price of ₹2,733.12 implies a 17.89% upside, supported by analysts’ confidence in Angel One’s client base and diversification efforts.

Investors should consider the following:

• Upside Potential: The company’s strong client growth, digital leadership, and diversification into wealth management make it a compelling long-term investment in India’s financialization trend.
• Risks: Regulatory pressures, volatile trading volumes, and high operational costs could continue to weigh on profitability. The stock’s premium valuation (P/E of 15.42) requires sustained earnings recovery to justify.
• Dividend Support: The ₹26 per share final dividend and 0.94% yield provide some downside protection for income-focused investors.

Long-term investors may find the current price levels an attractive entry point, given Angel One’s market position and growth potential. However, short-term traders should exercise caution due to regulatory uncertainties and market volatility.

Broader Market Implications

Angel One’s Q4 FY25 results highlight the challenges facing India’s broking industry amid regulatory changes and market volatility. The decline in F&O trading volumes underscores the need for brokers to diversify revenue streams and adapt to a stricter regulatory environment. Angel One’s focus on wealth management and mutual funds aligns with industry trends, as firms like Motilal Oswal Financial Services and ICICI Securities also emphasise non-broking services.

The results also reflect broader market dynamics, with retail investor sentiment impacted by geopolitical uncertainties and domestic market performance. As India’s demat account base grows, brokers with strong digital platforms and diversified offerings, like Angel One, are well-positioned to capture market share, provided they navigate regulatory and competitive challenges effectively.

Conclusion

The 6% intraday plunge in Angel One’s stock price on April 17, 2025, following a 48.7% YoY profit decline to ₹174.5 crore in Q4 FY25, reflects investor disappointment with the company’s weak financial performance. Regulatory headwinds, lower trading volumes, and increased costs, including IPL spending, drove the profit tank, while a 22.2% YoY revenue drop to ₹1,056 crore added to the challenges. Despite the setback, Angel One’s 39.5% YoY client base growth to 3.1 crore, diversification into wealth management, and ₹26 per share final dividend signal resilience and long-term potential.

Investors face a mixed outlook: while regulatory and competitive pressures pose risks, Angel One’s digital-first approach, strong client metrics, and strategic diversification offer growth opportunities. With a consensus target price of ₹2,733.12 and a 17.89% implied upside, the stock remains attractive for long-term investors betting on India’s financialization trend. As the broking industry evolves, Angel One’s ability to adapt to regulatory changes and capitalise on retail investor growth will be critical to its recovery and sustained success.