Angel One stock initiated with Neutral rating by UBS on regulatory risks

Published 18/08/2025, 06:32
Angel One stock initiated with Neutral rating by UBS on regulatory risks

Investing.com - UBS initiated coverage on Angel One Ltd (NSE:ANGELONE) with a Neutral rating, citing regulatory uncertainties and valuation concerns.

Angel One, India’s third-largest retail broker with 7.3 million NSE active clients as of June 2025, faces potential headwinds from regulatory changes aimed at curbing speculation in the market, according to UBS.

The investment bank forecasts a 7% year-over-year revenue decline for Angel One in fiscal year 2026, primarily driven by an estimated 15% drop in equity derivatives orders. Brokerage income, which constitutes 63% of the company’s revenue as of FY25, is expected to decrease in FY26.

UBS projects a gross brokerage income compound annual growth rate (CAGR) of 9% over FY25-28E, below Angel One’s estimate of 16.9% growth. The bank expects the financialization of savings in India to grow at 13-14% during the same period.

Despite near-term challenges, UBS anticipates a normalization in trading activity by late FY26, forecasting a revenue CAGR of 10.4% for FY25-28, slightly above the market-implied growth rate of 9.1% at current price levels.

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