The credit rating agency has reaffirmed the rating on the short-term facilities and commercial paper of the company at ‘CRISIL A1+’.

The outlook revision is driven by continued strong market position in the broking segment as well as increasing diversification of revenue profile towards other capital markets segments.

The group continues to strengthen is market position, as reflected in addition of around 70 lakh clients during the last 12 months, taking its overall client base to 1.95 crore as of December 2023. The active client base also grew 25% year-on-year and stood at 5.3 lakh as of December 2023 (~4.2 lakh as on December 31, 2022).

Consequently, the group has maintained its strong market position in terms of trade volumes, with overall average daily turnover (ADTO) growing by 150% to Rs 35,971 as on 31 December 2023 billion from Rs 14,478 billion a year ago. Number of contracts also improved to 350 million in 31 December 2023 from 226 million in 31 December 2022.

This led to an improvement in earnings profile, with overall profit after tax (PAT) of Rs 786 crore (translating into return on equity of ~43%) during the nine months of fiscal 2024. The broking income grew around 32% year-on-year to Rs 1,499 crore for the same period from Rs 1,192 crore for the corresponding period previous fiscal. Besides, total income increased by 33% to Rs 2,920 crore, driven by sharp rise in income from allied services, primarily margin trading facility.

For the five fiscals through December 2023, the group’s revenue has been highly skewed towards broking income, which accounted for 67-69% of total revenue. While broking will remain the flagship business, the group has been focusing on leveraging its customer base since the last 3-4 quarters, for cross-selling other financial services products including mutual funds, insurance products, and retail loans. The ability to diversify revenue profile further will remain a key sensitivity factor.

The ratings continue to factor in the extensive experience of the promoters in the retail broking segment and the group’s comfortable capital position and sound risk management systems. These strengths are partially offset by continued high dependence on broking income, increasing competition in the broking segment and susceptibility to uncertainties inherent in the capital market business.

Angel One is engaged in retail broking in the equity, commodity and currency segments. Apart from broking, the company also provides products such as margin trading facility, loan against shares (through AFPL), financial product distribution, research, and advisory and depository services.

The scrip rose 0.89% to end at Rs 2839.90 on the BSE today.