- Angel One plans to diversify its business by expanding into the assisted business channel.
- This expansion will involve partnerships with fintechs, health tech players, banks, and mutual fund distributors.
- The goal is to create a multi-channel, multiproduct approach that allows for cross-selling of core products.
- The strong increase in the number of daily orders is due to market buoyancy and the activation of new customers.
- New customer acquisition, including through the AP channel, has contributed significantly to growth.
- Angel One reported strong performance with total gross revenues exceeding Rs. 10 billion in Q2 FY '24.
- The company has acquired over 2 million customers in the same quarter, bringing its client base to over 17 million.
- Gross broking revenue accounted for about 69% of total gross revenues in Q2 FY '24.
- Interest income, ancillary transaction income, and finance costs were highlighted in the financial discussion.
- The company's consolidated operating margin stood at 51.3%.
- Consolidated profit after tax from continuing operations grew by 37.9% quarter-on-quarter.
- The Board approved a distribution of 35% of post-tax profits as a second interim dividend to shareholders.
- Angel One aims to become a more integrated financial service provider with a focus on expanding its product offerings.
- Angel One has incurred increased advertising expenses, but the exact amount is not disclosed.
- The growth in advertising costs is due to client acquisition and branding campaigns.
- Interest costs increased due to changes in margin requirements and the abolition of client bank guarantees.
- Angel One provided guidance of Rs. 40 crores for the nine months ending on March 31, 2024, related to these costs.
- Impact on float income from instant settlement is uncertain and will depend on how margins change.
- The authorized channel model is a pass-through model, where Angel One earns a portion of the distribution fees.
- Earnings through this model depend on the distribution of financial products (e.g., loans, mutual funds, insurance).
- EBITDA margins in this business are expected to be lower than in the direct business model due to revenue-sharing with authorized persons.
- The business model discussed focuses on partnerships with business partners in the assisted channel.
- The cost of servicing customers is borne by business partners, making the model profitable.
- The company offers affiliation with manufacturers and leverages its scale to negotiate better prices.
- Customized solutions are provided using AI-ML tools and data science.
- The company's unique selling proposition (USP) lies in managing customers' asset portfolios, distribution, and asset allocation.
- The platform aims to help assisted business partners acquire more customers at a lower cost and provide intelligent insights on products and portfolio performance.
- Margins are not the primary focus; the emphasis is on sustainable, scalable businesses.
- The sharing ratio with business partners can vary (e.g., 70-30, 50-50, or 90-10) depending on the business's scale and returns on investment.
- The focus is on gaining market share and offering a diverse range of services through the assisted channel.
- The company aims to be a distributor in the lending market.
- Focus is on providing access to the market, creating a distribution network, and co-sharing revenues with lending experts for risk management and collection.
- The company intends to remain a distributor rather than underwriting risk.
- Payment aggregators can use transaction data for underwriting purposes, which differs from the company's role as a distributor.
- The company has filed for approval for its AMC.
- Once approvals are received, they plan to offer passively managed funds.
- The credit business is expected to go live before the end of the fiscal year.
- The focus will be on cross-selling to the existing customer base.
- The increase in derivative market share is attributed to product improvements, such as free access to Sensibull, basket orders, options watchlists, and other enhancements.
- The company aims to create a wholesome user experience and make it easier for active users to engage with the platform.
- The discussion regarding the SEBI report on derivatives trading and the impact on retail traders' profits and losses did not yield a definitive answer.
- The company deploys around Rs. 1,500-1,600 crores of its own cash for margin and working capital requirements.
- The initial approach for the loan business is cross-selling to the existing customer base, so the customer composition will reflect the current customer mix.
- The lending market opportunity lies in Tier 2, Tier 3, and Tier 4 regions, which are currently underserved by fintech players. The company sees potential in addressing this market.