BROKING WILL REMAIN 'STRONG CORE' BUT LENDING, OTHER BUSINESSES GROWING AS WELL, SAYS ANGEL ONE CEO

Angel One’s core will continue to be its brokerage business despite regulatory headwinds hitting revenue, CEO Ambarish Kenghe has told Moneycontrol, adding the changes have pushed the company to lay the ground for lending and wealth management verticals.

"You will see that broking may continue to remain a strong core but we are sowing the seeds for other businesses. We are starting to see other things rise. When we look at a five-ten-year period, these will drive revenue and growth but in the short term, you will continue to see broking being significant,” Kenghe said.

Broking revenue account for 60 percent of Angel One’s quarterly topline.

Dependency on brokerage

The dependency and the regulatory changes have hobbled all top brokerages, from Zerodha, Groww to Angel One, with revenue as well as profits take a hit.

The changes include the rise in the Securities Transactions Tax (STT) for options, a reduction in weekly options contracts to just two, an elevated Basic Services Demat Account (BSDA) limit, removal of the exchange transaction charges rebate and a general decline in trading volume.

Angel One’s revenue declined by around 12 percent in the first and the second quarters this fiscal. Net profit dropped around 35 percent during both quarters.

These short-term setbacks won’t change the company’s long-term strategy.

Long-term diversification

“We should have a long-term strategy for where we are going, versus changing the strategy every day based on what the market is doing. That is the easiest way to create confusion and upset the company culture. We should have strong beliefs and opinions that are loosely held,” he added.

Margin trading facility, lending, credit distribution and wealth offerings are expected to grow over the next decade.

Angel One is finalising its FY27 strategy document, which Kenghe shared with senior executives this week. The plan keeps artificial intelligence at the centre and doubles down on fundamentals such as safety, security, speed and simplicity.

“Lending may evolve further. And there may be continuous transformation of the business and the organisation to meet needs of the customers and the ecosystem” he said. “Strategy is like cryptography: the algorithm is known, the key is execution.”

Number game

In Q2, Angel One reported an income of Rs 1,201.8 crore and a profit after tax of Rs 211.7 crore.

Its NSE active clients stood at 6.9 million in September and October and total customer assets (AUC) reached Rs 1.4 lakh crore.

Credit disbursal was around Rs 460 crore, with the average client funding book at Rs 53 billion. Angel One’s AMC business reported Rs 4 billion in assets.

FY27 growth strategy

The company is widening access to wealth management through Ionic Wealth, which lowers the entry level to under Rs 1 crore. The platform combines self-service with relationship managers.

“This democratises wealth management,” Kenghe said. This is a radical shift for Angel One, which was one of the most popular full-service brokers before Zerodha and other tech-driven discount brokers disrupted the broking industry.

Its rival and the country’s largest brokerage firm by active investors, Groww, is also betting its next phase of growth in wealth-management for individuals with assets between Rs 50 lakh to Rs 5 crore. This segment is considered untapped as most wealth management firm targets consumers with over Rs 5 crore in assets.

Rise in disposable income

While the business is not yet a major revenue driver, Kenghe expects it to expand as disposable income rises and younger investors stay invested for the long term.

“Market consolidation is a natural process as cycles unfold,” he said.

To add muscle to the wealth journey of customers, the top three brokers have launched asset management companies, as passive funds and index funds have gained prominence over the past two to three years.

Angel One’s AMC arm continues to focus on passive funds, including nine schemes and a proprietary index that combines quality and momentum.

Missing the bus on mutual funds

On mutual funds and systematic investment plan products for new-age and young customers, Kenghe said incumbents did not “miss the bus” as SIP-led platforms scaled sharply.

Groww commands over 43 percent of the retail SIPs. Angel One is the second-largest incremental SIP distributor in India.

“Everyone took different approaches. The game is long, and there are different routes to success,” he said.

Angel One is open to acquisitions or partnerships under a flexible framework.

“We stay open to opportunities – build, buy, partner,” the CEO said. The firm’s recent investment in life insurance platform LivWell reflects that approach. “There is no fixed thesis. If something is interesting, we will explore it to... Even if nothing happens, conversations lead to mutual learning,” he said.

The company also offers access to US market through Vested Finance and global fund. “India is strong but the US remains an important economy and source of innovation,” Kenghe said.

2025-12-11T06:55:23Z