Angel One Q3 Results Review - Higher Interest Income Drives 17% Earnings Beat: Motilal Oswal

Motilal Oswal Report

Angel One Ltd.'s profit after tax surged 7% QoQ/39% YoY to Rs 2.3 billion (16.9% beat) in Q3 FY23. The profitability was driven by a 6.2% beat in operating revenue, which rose 1% QoQ and 32% YoY to Rs 4.6 billion. The key contributor to the outperformance was a 26% beat in net interest income.

Volatility in the equity market led to a decline in the active client ratio to 33.6% in Q3 FY23 from 36.2% in Q2 FY23.

Angel One's operating expenses grew 21% YoY but were flat QoQ to Rs 2.65 billion (3% lower than our expectations), driven by a 43% YoY jump in employee costs.

Other expenses grew 11% YoY to Rs 1.5 billion, but 5% lower than our estimates.

Cost-income ratio declined substantially to 46% (better than our estimate of 50.5%) from 47.6% in Q2 FY23. CIR improved 321 bps YoY. The number of orders declined to 226 million in Q3 FY23 from 230 million in Q2 FY23.

The board has recommended a dividend of Rs 9.6 per share.

For nine months-FY23, total income/profit after tax was at Rs 16.5 billion/Rs 6.2 billion representing a growth of 41%/48%.

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