3 days Ago
Angel One Ltd’s March quarter (Q4FY25) performance took a knock from the Securities and Exchange Board of India’s (Sebi) new regulatory measures aimed at curbing trading volumes in the derivatives (F&O) segment. The company discloses a monthly business update, so the poor performance was largely anticipated. This was the first full quarter reflecting the impact of Sebi’s revised regulations—such as curbs on weekly expiries, increase in lot sizes, and steeper margin requirements for trading, among others.
Angel One, which derives about 77% of its gross broking revenue from the F&O segment, bore the . Angel One charges a flat fee per order of 20. The number of orders fell 22% quarter-on-quarter to 327 million, leading to a similar drop in the gross broking income, which declined to 633 crore.
Quarterly order volumes are now down a third from the peak of 489 million in Q2FY25. Net profit declined by 38% sequentially to 175 crore. The slide could have been steeper if not for the one-time reversal of 64 crore in employee variable pay.
Gross client acquisition fell 22% to 1.6 million in Q4FY25, but the active client base remained largely stable at 7.6 million—a saving grace amid the weak quarter.
This stability is notable, given concerns of client attrition following the company’s introduction of a brokerage fee of 20 or 0.1% of the order value, whichever is lower, for cash market transactions, effective from November 2024. Market share trends were mixed.
While the company gained ground in the cash segment—rising slightly quarter-on-quarter to 17.5%—it lost 40 basis points in the , where its share fell to 21.4%.
During the earnings call, the management attributed this decline to their predominantly retail-focused client base. Retail traders have been disproportionately impacted by the new Sebi regulations, unlike institutional players who are better positioned to meet the higher margin requirements. Meanwhile, Angel One has been diversifying, aiming to evolve into a full-spectrum financial services distributor to capture more wallet share from clients.
But for now at least, these initiatives are unlikely to meaningfully shift its revenue mix from broking. The management believes that the trading activity in the stock market is likely to stay subdued in the first half of FY26. The normalization of Ebitda margin can be expected from Q4FY26 onward.
Hence, a cut in Bloomberg consensus earnings estimated for FY26 cannot be ruled out..
