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ICICI Securities
Angel Broking (Buy)
Target: ₹1,284
CMP: ₹1271.25
Angel Broking has successfully maintained its business momentum in Q1FY22 with 99 per cent/19 per cent y-o-y/q-o-q PAT growth. We estimate PAT to clock 22 per cent CAGR between FY21-FY23 and value the stock at 22x (18x earlier) FY23 EPS of ₹58 (₹50 earlier). Maintain ‘Buy’ with a revised target price of ₹1,284 (₹900 earlier).
Q1FY22 earnings register strong 13 per cent q-o-q growth. Flat fee revenues have grown 21 per cent q-o-q to ₹160 crore in Q1FY22 compared to ₹330 crore in FY21. Traditional revenues were ₹50.30 crore in Q1FY22 compared to ₹210 crore in FY21. The authorised person driven segment revenue grew 7 per cent sequentially to ₹52.70 crore compared to ₹160 crore in FY21. Margin trading funding (MTF) net interest income was ₹46.90 crore in Q1FY22 compared to ₹140 crore in FY21. Despite 12 lakh gross client addition in Q1FY22, EBITDA margin remained stable at 49 per cent. Angel Broking also declared first interim dividend of ₹5.15 per share (total dividend of ₹12.9 per share in FY21).
Within gross brokerage, derivatives mix has improved to 63 per cent in Q1FY22 from 60 per cent in Q4FY21 and 41 per cent in Q1FY21, while share of cash has declined to 31 per cent in Q4FY21 from 33 per cent/50 per cent in Q4FY21 and Q1FY21, respectively.
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