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Shares of broking firm Angel One Ltd surged 6.5% on the National Stock Exchange in opening deals on Thursday, reacting to the company's stellar March quarter (Q4) earnings.
Earnings growth in the fiscal fourth quarter (Q4FY22) was aided by increasing retail footprint, especially in smaller cities and towns. Consolidated profit after tax grew 24% sequentially to ₹205 crore in Q4, and FY22 net profit of ₹625 crore more than doubled from FY21. The company exceeded analysts’ expectations on this parameter aided by improving revenue from the broking segment and higher net interest income.
Among the key highlights were gross client addition of 1.5 million in Q4FY22 and 5.3 million in FY22. According to the company’s management, this was the highest ever client addition that it has seen in a quarter. Among these, 94% client additions were from tier-2/3 cities, note analysts. The number of orders rose 17% sequentially and 83% year-on-year and were at a record high in the March quarter.
The company’s management added that it continues to focus on boosting its digital platform and aims to have a super app soon. “Q4FY22 witnessed a few major releases of our Super-App as we put it into advanced beta and validation phase. The first look will be delivered in this quarter," the company’s management said in its earnings press release.
Investors would reckon that the company’s management has been saying that the compete rollout of its super app will happen in a phased manner over a period of time. So, against this backdrop, a timely launch will be among the factors investors would watch out for.
“As guided by the management, it continues to invest in technology and strengthen its position. The client addition trajectory for the industry as well as Angel Broking will continue, led by stark under penetration," analysts at Motilal Oswal Financial Services Ltd said in a report.
It added that the cyclicality in revenue is much lower for discount brokers versus their traditional counterparts due to the shift towards a flat fee revenue model.