Motilal Oswal has given Buy recommendation for Angel One recommended buy rating on the stock with a target price of Rs 2300 in its researc with a target price of Rs. 2300 in its research report issued on May 05, 2022
Motilal Oswal’s research report on Angel One
Angel One (Angel) released its monthly update highlighting the key business numbers for Apr’22. The key takeaways are as follows: Angel’s gross client acquisition run rate saw a marginal decline to 0.44m in Apr’22 from 0.48m in Mar’22. However, the addition is better than our estimate of 0.4m per month for FY23. Total client base stood at 9.64m as of Apr’22 (+5% MoM and 118% YoY). Average funding book saw strong 10% MoM growth to ~INR17.2b. The number of orders, at 66.14m for Apr’22, declined 10% MoM whereas the number of orders per day remained flattish at 3.5m for the month. Overall ADTO increased 7% MoM with F&O ADTO increasing 7.6% and Cash ADTO rising 11%. Angel gained market share in the F&O and Commodity segments (20bp and 80bp, respectively) MoM, whereas lost 10bp MoM in the Cash segment. On a YoY basis, the company lost market shares in both F&O and Cash segments.
We estimate a PAT CAGR of 23% during FY22-24 and an RoE of 39.6% in FY24. The stock trades at 14.8x FY24E P/E, which is attractive considering Angel’s strong earnings growth profile. We maintain our BUY rating on the stock with a one year target price of INR2,300 (premised on 20x FY24E EPS).