Angel One Shares Rise Even as Q1 Profit Tumbles 61% on SEBI's F&O Crackdown

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Posted July 17, 2025

 Angel One Shares Rise Even as Q1 Profit Tumbles 61% on SEBI's F&O Crackdown

Introduction

Angel One, one of India's top retail stockbrokers, surprised the markets recently. Even after reporting a massive 61% year-on-year drop in Q1 FY26 profit, its shares rose on the NSE. Confusing, right? Let's break it down.

SEBI’s regulatory clampdown on derivatives (F&O) trading, a significant revenue driver for Angel One, hammered the company’s earnings. Yet, some parts of the business showed promise, giving investors a reason to hold on—and even buy.

 Angel One’s Q1 FY26 Financial Performance

Net Profit Decline

Angel One reported a net profit of ?114.4 crore, plunging 61% YoY from ?292.7 crore. On a QoQ basis, profit was down 34.4% from ?175 crore in Q4 FY25.

That's not just a dip. That’s a crater.

Revenue Overview

Revenue also took a hit, down 19% YoY to ?1,140 crore from ?1,405 crore. However, sequentially, it rose 8% QoQ from ?1,056 crore, signaling some recovery after SEBI’s F&O tightening.

EBITDA & Margin Pressure

EBITDA fell by 41.7% YoY to ?274.1 crore. Margins dropped sharply to 24.04%, compared to 33.44% a year ago. Clearly, the business is facing operational heat.

 What Triggered the Fall in Profit?

SEBI’s Crackdown on F&O

SEBI has been tightening norms around retail F&O trading, aiming to protect small investors. Since a huge chunk of Angel One’s revenue comes from F&O brokerage, the crackdown hit them hard.

Rise in Operating Costs

Apart from regulation, costs soared. The company invested heavily in IPL sponsorships and employee benefits. While these are long-term brand plays, in the short term, they’ve hurt profitability.

 Despite It All, Why Did the Stock Rise?

Positive Market Sentiment

At ?2,748, Angel One shares were up 1.2% on July 17. Why the optimism? Markets often look ahead, not just at past numbers.

Sequential Growth in Revenue

The 8% QoQ rise in revenue shows recovery may already be underway. Investors likely see this as a bottoming out phase.

Order Book Growth

Angel One processed 34.3 crore orders in Q1 FY26, up from 32.7 crore. F&O orders rose by 4.5%, and cash orders held steady. These figures signal strong customer engagement despite regulatory changes.

 Angel One’s Market Share Trends

Drop in F&O and Retail Turnover Share

Angel One’s share in:

  • Retail equity turnover: Down 17 bps to 19.7%

  • F&O market: Down 47 bps to 21%

This indicates increased competition and impact from SEBI reforms.

Competitive Landscape

With players like Zerodha, Groww, and Upstox fighting for wallet share, retaining leadership in F&O won’t be easy.

 Strategic Moves & Future Growth Plans

New Business Lines

Angel One is diversifying. New segments like:

  • Loan distribution

  • Wealth management

  • Mutual funds

  • Fixed deposits
    are gaining traction, though they contribute only 3% to revenue today.

Digital-First Strategy

Angel One continues to focus on building a tech-driven financial ecosystem, aiming to become a one-stop solution for Indian investors.

 Analyst Opinions & Brokerage Reports

Motilal Oswal View

Motilal Oswal noted that while profit dropped, revenue was supported by cash delivery brokerage. It praised the company’s new initiatives and maintained a ‘Buy’ rating.

Investec Commentary

Investec echoed the sentiment. It beat PAT estimates due to cost control and expects QoQ earnings growth going forward. Their target price? ?2,700—right around current levels.

 Investor Sentiment & Stock Performance

Share Price Action Post-Results

Despite weak numbers, the stock didn’t tank. Why? Because expectations were already low, and Angel One managed to beat some of them.

Technical & Fundamental Support

The stock holds key support at ?2,600 and is riding a positive trend backed by retail optimism and long-term growth bets.

 Broader Implications for Broking Sector

Regulatory Overhang

Angel One’s results show how deeply SEBI’s moves can affect retail brokerages. Expect further scrutiny in the F&O space.

Shift Towards Diversification

To survive, broking firms need non-brokerage revenue. Angel One’s pivot to loans and wealth could be the new norm.

 What Should Investors Do?

Risks & Opportunities

Risks:

  • Ongoing regulatory tightening

  • Margin pressure

Opportunities:

  • Diversified revenue streams

  • Massive retail base

  • Brand visibility via IPL and ads

Long-Term Outlook

If Angel One executes well on its diversification plans, it can emerge stronger and more balanced in the post-F&O boom world.

Conclusion

Angel One’s Q1 FY26 was rough on paper—profit nosedived, margins narrowed, and market share declined. But the company still grew sequentially, showed resilience in order volumes, and took steps towards long-term sustainability.

In the face of SEBI’s crackdown, Angel One isn’t backing down. Instead, it’s evolving.

Investors with a long-term vision might find this a story worth sticking with. 

Disclaimer

The information provided in this article is for educational and informational purposes only. It does not constitute financial, investment, legal, or tax advice. Please consult with a certified financial advisor or a SEBI-registered professional before making any investment decisions. The author and publisher are not responsible for any financial losses or legal consequences incurred as a result of using this information 

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