Over the past month, shares of Angel One have declined by over 27 percent,
reflecting the challenges the company is currently navigating. On January 14,
shares fell more than 5 percent to Rs 2,309 apiece following the release of its Q3 FY25 results, which revealed its smallest quarterly profit increase since listing in
2020. The decline was largely attributed to tighter regulations in the derivative
sector, which have impacted performance.
For the third quarter of FY25, Angel One reported an 8 percent year-on-year rise
in net profit to Rs 281 crore. However, this marked a 33.5 percent sequential
drop compared to the second quarter. Meanwhile, total revenue from operations
increased by 19 percent year-on-year but fell by 17 percent quarter-on-quarter,
highlighting the mixed nature of its performance.
The challenges stem from new rules announced in October by India’s market
regulator, aimed at tightening regulations for equity derivatives. These changes
raised the entry barriers and increased the costs of trading in derivatives, a move
designed to address concerns about the unchecked growth in retail trading within
this asset class. While these regulatory shifts aim to stabilize the market, they
have added pressure on firms like Angel One that rely heavily on derivative
transactions.
As Angel One navigates these changes, its ability to adapt and innovate will be
key to overcoming these hurdles. Investors and analysts are keenly watching
how the company plans to regain momentum and leverage its technology-driven
approach to capture opportunities in the evolving market landscape.