Steady Client Acquisition Of 109% YoY, Buy This Capital Market Stock For Aggressive 55% Uptick: Motilal Oswal

Motilal Oswal has recommended investors buying the stocks of Angel One for an aggressive 55% short-term return. Here, the portfolio and company performance has been discussed, along with the target price of the stock, as mentioned by the brokerage firm.

Angel One: Target Price, Current Market Price, and Market-Cap

The Current Market Price (CMP) of Angel One is Rs. 1487. Motilal Oswal has estimated a Target Price for the stock at Rs. 2300. Stock is anticipated to give a 55% return, in 1 year. This is a mid-cap company with a market capitalization of Rs. 12,111 crore.

Stock Outlook
Current Market Price (CMP)	Rs. 1487
Target Price	Rs. 2300
Potential 1 year return	55.00%
52 week high share price	Rs. 2,022
52 week low share price	Rs. 990.50

Angel One is a technology-led financial services company providing broking and advisory services, margin funding, loans against shares, and financial products distribution. Their broking and allied services are offered through our online and digital platforms, and their network of over 16,000+ registered Authorised Persons, as of December 31, 2021.

Company performance: Angel One

The company has posted a towering financial report. Angel One's total client base stood at 10.1m as of May 2022. The client base has increased by 5% on an MoM basis, while it increased by 109% on a YoY basis. Angel One's gross client acquisition run rate has seen an uptick to 0.47m in May 2022, which was 0.44m in April 2022. on the other hand, the addition run rate stood better than Motilal Oswal's monthly anticipation of 0.4m in FY23.

The average funding book has seen a strong MoM growth by 10% of around Rs. 18.8b. On an MoM basis, the company has lost 150bp market share in the F&O segment, but it has gained 190bp in the Commodities segment. The number of orders stood at 70.6m in May'22, up 7% MoM, whereas the number of orders per day saw a 4% monthly decline to 3.4m.

However, Angel One's overall average daily turnover or ADTO has fallen by 6% on an MoM basis, with a fall of 5.5%/27.5% in F&O/Cash ADTO.

Motilal Oswal Speaks about the stock advantages

Motilal Oswal has mentioned the stock advantages and potential of the stock, considering its sustained investment guidance. The brokerage firm has stated, "Angel One is a perfect play on the financialization of savings and digitization. We expect the company to record a 23% revenue CAGR over FY22-23. The EBITDA margin is expected to remain steady at around 50% as Angel One has guided at sustained investments in technology and marketing, with a focus on acquiring more customers and improving its activation rates. We expect a 23% PAT CAGR over FY22-24 and an RoE of 39.5% in FY24. The stock trades at 13x FY24E P/E, which is attractive considering Angel One's strong earnings growth profile." The brokerage firm has maintained a buy rating on the stock, premised on 20x FY24E EPS.

Disclaimer

The above stock was picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.