Angel One gets 'Buy' call; what makes JM Fin bullish after 20% YTD fall

JM Financial assigned a target price of ₹2,700 apiece on Angel One, implying an upside of 17.5 per cent from Friday's close

JM Financial initiated a 'Buy' coverage on the shares of Angel One Ltd., citing a recurring revenue flow while expecting a bounce back in volume and bottom line in the coming years. 

 

The brokerage firm assigned a target price of ₹2,700 per share on the discount broking platform, implying an upside of 17.5 per cent from Friday's close. Shares of the company rose over 1 per cent on Monday to ₹2,323 apiece. 

 

Angel One's client base grew at a 48 per cent CAGR over the financial year 2021-25 to 32.5 million as of June 2025, while its 21.7 per cent share in incremental demat accounts signals strong customer acquisition and growth prospects, JM Financial said.

 

The company has "strategically" started its asset management company and wealth management business, and entered into a joint venture to develop and distribute insurance products, it said. This gradual transition is expected to result in the unlocking of growing and recurring revenue streams, JM Financial added. 

 

JM Financial expects Angel One's profit after tax to decline 15 per cent in FY26, citing cautious client acquisition in FY25 and the first half of FY26, along with investments in adjacent businesses, before recovering from FY27.

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Angel One shrugs off major regulatory impact

Despite regulatory changes addressing retail losses in derivatives, including up-streaming of client funds, transparent charges and fewer expiry days, Angel One maintained FY25 profit after tax at FY24 levels while continuing to invest in adjacent businesses, the brokerage noted. "As the company is incrementally farming its existing client base, we expect revenue to be more recurring, providing a steady runway while it resumes its hunt to return to previous levels as the cost of acquisition normalises."

 

Regulatory measures such as peak margin norms, margin segregation and quarterly payout of client funds have made markets more conducive for retail investors. Active individual traders in the derivatives segment, among the top 15 brokers, increased from 0.7 million in FY19 to 9.6 million in FY24, a 68 per cent CAGR. 

Angel One valuation over peers

In Indian markets, 5Paisa trades at 17x FY25 (trailing) profit after tax, but with a much smaller scale, FY25 profit after tax of ₹68 crore and market capitalisation of ₹11,00 crore, about 15 times lower than Angel One. 

 

Among asset and wealth management companies under coverage, Angel One is trading largely in line with UTI AMC and Nuvama Wealth Management, JM Financial said.  

Angel One share price history

The company shares rose for the second straight day on Monday. The stock is down nearly 40 per cent from its levels in 2024 and is down 21 per cent so far this year. This is compared to a 4.9 per cent advance in the benchmark Nifty 50 this year. Angel One has a total market capitalisation of ₹20,937.42 crore.