ANGELONE Q2 FY27 Earnings Call: Record PAT Jumps 58%, Client Base Hits 40 Million

ANGELONE held its Q2 FY27 earnings call on October 15, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Strong Operating Leverage Drives Record Profitability

• Consolidated revenue of Rs.14.3 billion (+18.9% YoY) — operating profit of Rs.4.9 billion (+52% YoY) and PAT of Rs.3.35 billion (+58% YoY) in Q2 FY 2026-2027, reflecting strong operating leverage.
• Consolidated operating margins expanded to 45.1% — vs 34.5% in Q2 FY 2025-2026; standalone margins hit 48.9%, exceeding the guided 40-45% range. Normalizing for IPL/ESOP costs, margins were stable sequentially at 43.8%.
• Interest income grew 34% YoY to Rs.5.1 billion — supported by a record closing client funding book of Rs.82.1 billion and 437,000 funded clients (+30% YoY); revenue mix shifted towards non-broking income.
• Average client funding book hit a lifetime high of Rs.74.5 billion (+40.5% YoY) — average daily orders rebounded to 5.8 million in September (+12% vs August).
• Client base reached 40 million — 1.5 million new clients added (+11.6% QoQ); equity retail market share of 19.7% and derivatives retail turnover share of 22.1% (rising to 22.5% in September).
• Net worth rose to Rs.67.1 billion — board approved a second interim dividend of Rs.1.4 per share for FY 2026-2027 (record date Oct 22, 2026).
• Macro backdrop supportive — management cited GDP growth of 7.8% in Q1 FY27; Chairman Dinesh Thakkar was absent from the call.

Volume Softness Absorbed; Employee Cost Held Flat

• Broking volumes declined 10% QoQ — broking fees/commission revenue declined by a narrower 5% QoQ in Q2 FY 2026-2027, attributed to strong commodities growth improving overall price realizations.
• Commodities ADTO grew >40% in Q2 FY 2026-2027 — management attributed the market share nuance to overall market expansion rather than a competitive issue.
• Employee count at ~3,050 as of Q2 FY 2026-2027 — employee cost guided at ~Rs.1,100 crores for FY 2026-2027 (flat vs FY 2025-2026), driven by attrition and slowed backfills; lower Q2 run-rate partly reflected one-off attrition costs from the back-to-office mandate.
• Broking + distribution margin guided at ~45% by end of FY 2026-2027 — vs the actual console (all-business) margin of 43.6% in Q2 FY 2026-2027; CFO cited revenue growth as the dominant margin driver over cost, with console margin guidance of 40-45% and improvement expected over the next 2-3 years as other businesses scale.
• New-business EBITDA drag widened to 3.5-4% — up from 2-3% in FY 2025-2026, quantified for Q2 FY 2026-2027.
• Brand spend as% of revenue expected to decline over the medium term — absolute spends not expected to increase significantly while revenue scales; IPL spend continues for 1-2 years (FY 2026-2027 / FY 2027-2028).

Record Funding Book with High-Quality Collateral

• 85%+ of the MTF portfolio classified as "blue chip" or "good" — as of Q2 FY 2026-2027; Group CEO assessed MTF book quality as solid, citing low risk from the ability to square off positions if margins fall below a threshold.
• Rs.75.5 billion borrowing book remains well-collateralized — 84% of funded clients have exposures under Rs.1,000 and 82% of the closing book is less than 30 days old, with negligible delinquencies.
• Credit distribution hit a record annualized run-rate of Rs.33 billion in September — best month ever; distribution income stood at ~Rs.71 crores in Q2 FY 2026-2027, driven by credit distribution and marquee IPOs; positive outlook guided for H2 FY 2026-2027 and beyond, citing internal AI/ML and platform stability improvements.
• MTF lending rate held at 14.99% for FY 2026-2027 — no increase currently planned; MTF book growth described as "very healthy" following an all-time high in Q1 FY 2026-2027.
• RBI's benchmark rate hike marginally increased Angel One's cost of borrowing — in Q2 FY 2026-2027, but NIMs were not impacted; no differential brokerage is charged for MTF customers.
• Probability of default model upgraded; beta loan-against-securities launched — in Q2 FY 2026-2027, with management guiding that credit will be scaled with discipline.

Activation Over Volume: LTV/CAC Takes Priority

• Analyst Mohit Surana flagged an activation gap — over ~2 years ending Q2 FY27, Angel One added ~1.2 crore total users while NSE active clients declined from 7.4 million to 6.8 million (a drop of ~6 lakhs).
• Group CEO attributed the activation decline to muted market performance — over the last two completed fiscals (FY25-FY26) and structural changes from F&O regulation.
• Management prioritizes the right LTV/CAC equation over absolute KYC volumes — stating the latter can be "optical"; activation identified as the P0 priority, with FY 2026-2027 efforts spanning performance marketing adjustments, AP channel focus on activations, and product changes.
• Angel One was the second largest addition of active clients in the industry in September — signaling improving activation trends; client acquisitions grew 11% QoQ in Q2 FY 2026-2027, with NSE active market share improving and narrowing the gap to the largest competitor.
• Management cited a "multitude of factors" impacting LTV cohort calculations — over the last 2-3 years (FY24-FY26), but expressed confidence that expanding the product suite will drive "fairly strong" long-term LTV values.
• September 2026 SIP registration dip viewed as an optical variation — while industry F&O options ADTOs in October 2026 (Q3 FY27) were up ~39% month-to-date vs the prior month; management cited SEBI's CAS circular as a key tailwind.

Wealth, Credit, US Stocks and Distribution Build Out

• Broking revenue share fell to 54% in Q2 FY 2026-2027 — a shift management views as healthy diversification away from F&O dependence; F&O market share (ADTO) reached 22.5% in September, described as strong and rising with no current plans to adjust pricing.
• Ionic Wealth AUM stood at Rs.160 billion (+19.1% vs Q1 FY27) — Rs.16,000 crore closed in Q2 FY 2026-2027; management guided industry-standard yields of ~0.5% for the ultra HNI segment, with revenue recognition spread over the year of acquisition.
• Asset Management AUM was nearly Rs.6 billion — management is evaluating a comprehensive play including hiring a new leader to build scale.
• Live external pilot for US stock investing via Gift City (IFSC) — with a US brokerage partner in Q2 FY 2026-2027, citing strong Indian customer interest as a key TAM driver and a strategic diversifier against domestic market gyrations; the company received IFSC authorization.
• Distribution revenue guided to reach low double digits of total revenue over the next 2-3 years (by ~FY 2029-2030) — net broking income mix remained 75:25 in favor of direct business; regular plan share of mutual fund distribution stands at roughly one-third.
• AP channel tracking ahead of the industry in H1 FY 2026-2027 — per Nishant (Chief Business Officer - AP Business), with distribution products (MF, insurance, lending, advisory) growing at a triple-digit rate.
• IRDAI's September consultation paper on insurance commissions — management noted the regulator's proposed lower-cost model favors digital platforms; the no-fee plan on the Jio app was clarified as a standard cross-channel customer acquisition offer, not a Jio-specific pricing initiative.

Margin Guidance Anchored; Growth Prioritized Over Margin Maximization

• OPM target of 45% guided for FY 2027-2028 — management acknowledged potential quarterly fluctuations but noted the possibility of higher margins depending on market conditions.
• Sustained standalone operating margins of ~45% guided for FY 2026-2027 — on an annual basis (inclusive of IPL costs), compared to the ~49% standalone level achieved in Q2 FY 2026-2027.
• Management declined to commit to a specific 50% PAT margin target — over a 3-4 year horizon (by ~FY 2029-2030 or FY 2030-2031), citing prioritization of growth investments over margin maximization, while reiterating comfort with a 40-45% PAT margin range.
• SEBI's circular on CAS viewed as a potential tailwind for Q3 FY27 — and the recent cash circular cited as a near-term (FY 2026-2027) upside driver for the F&O segment.
• Dividend payout ratio to be guided by business capital requirements — CFO confirmed the company is positioned to sustain quarterly dividends while investing in newer business growth over the next couple of years.
• Senior management (Shobit) cited strong tailwinds in the HNI/wealth segment over the next five years — driven by investment/research capabilities and technology, with a focus on global portfolio diversification via GIFT City offerings; management argued long-term pricing power is resilient as brokerage represents a small fraction of the customer's total investment, and diversification across distribution, cash, and commodity segments acts as strategic ballast against long-term F&O uncertainty.