Angel One's Q2 FY26: Navigating Market Shifts with AI and Diversification

Angel One Limited, a prominent Indian fintech platform, recently unveiled its Q2 FY26 financial and business performance, showcasing a strategic pivot towards a diversified, AI-driven ecosystem amidst evolving market dynamics. The company reported a total gross income of 1,200 crore for the quarter, marking a 5.3% increase quarter-on-quarter. However, on a year-on-year basis, gross revenues saw a 21% decline, primarily attributed to exceptional market buoyancy in the previous fiscal year and regulatory changes that impacted certain income streams across the industry. Despite this, net revenues demonstrated resilience, growing 5.6% quarter-on-quarter to 940 crore.

Segmental Performance and Strategic Diversification

The company's revenue mix continues to be dominated by broking commissions, with the Futures & Options (F&O) segment contributing a substantial 46% to gross revenues. Interest income from the client funding book and fixed deposits emerged as the second-largest contributor at 32%. Cash broking accounted for 8%, and commodity broking for 6%. Beyond these core broking activities, Angel One is actively cultivating new growth engines. Distribution, depository operations, and other income streams collectively contributed 9% to the gross revenues, highlighting the company's concerted efforts to diversify its income base.

Management emphasized that these emerging businesses, including wealth management, asset management, credit, and insurance, are in their gestation periods but are showing promising traction. The wealth management business, Ionic Wealth, has expanded its Assets Under Management (AUM) to over 6,140 crore with more than 1,250 clients across nine cities. The asset management business launched two new commodity funds, the Angel One Gold ETF and Angel One Gold ETF Fund of Fund, expanding its product bouquet to seven schemes. Credit disbursals surged by 97% quarter-on-quarter to 460 crore, translating into an annual run rate of 1,800 crore, underscoring growing client confidence and platform stickiness.

Leveraging Technology for Client Engagement and Efficiency

Angel One's strategic narrative is deeply rooted in technology and AI. The company launched its AI-powered chatbot, 'Ask Angel', which has significantly enhanced client query resolution. This in-house developed chatbot, leveraging open-source LLM models, resolves over 80% of user queries without escalation and has reduced resolution time by 67% for 95% of cases. This initiative not only improves client satisfaction but also drives operational efficiencies. Furthermore, the company is set to launch 'Ionic Agent' for its wealth clients, an AI-powered feature designed to assist with portfolio reviews, goal planning, and investment exploration.

Financial Summary Table (Q2 FY26)

(Note: Normalised EBDAT and PAT adjust for IPL expenses and ancillary transaction income. Client Funding Book and AUM figures are as of quarter-end.)

Outlook and Management's Vision

Angel One's management remains confident in its long-term growth trajectory, driven by India's young, digital-first population, rising affluence, and a supportive regulatory framework. The company is strategically expanding its reach into 'Bharat' (beyond metros and Tier 1 cities), with nearly 90% of its clients originating from these regions. A significant strategic move includes a joint venture with LivWell Holding Company PTE Limited to build a tech-led life insurance platform, where Angel One will hold a 26% stake. This partnership aims to make insurance accessible, adaptable, and affordable through data science and tailor-made products.

Management reiterated its guidance for an operating profit margin (OPM) of 40-45% by the exit of FY26, with a long-term target of 45-50%. They anticipate the broking business to grow at 25-30% long-term, while newer businesses are expected to contribute double-digit percentages to the top line within 3-5 years. The wealth business is projected to break even in 2.5-3 years, and the asset management business in 7-8 years. Angel One's focus on building a holistic financial ecosystem, leveraging AI, and maintaining a client-first approach positions it to capitalize on India's financialization journey, fostering trust and long-term relationships with its growing client base.