BENGALURU (Reuters) – Brokerage Angel One on Monday reported its smallest quarterly profit increase since listing in 2020 as tighter regulations in the derivative sector weighed.
The company — which competes with startups such as Zerodha, Groww and Upstox — reported a third-quarter profit that rose 8% to 2.81 billion Indian rupees ($32.4 million) from a year earlier. On a sequential basis, profit fell 33.5%.
India’s market regulator said in October that it will tighten the rules for equity derivatives, raising the entry barrier and making it more costly to trade in the asset class.
Indian authorities had raised concerns about the unchecked explosion of retail investor trading in derivatives.
Angel One, which provides trading and investing services through its app, said third-quarter average daily turnover dropped by nearly 12% when compared with the second quarter.
“While a few regulations introduced this quarter caused a temporary industry-wide impact … our aggressive client acquisition strategy, coupled with the normalisation of client activity, will drive renewed growth momentum in the coming quarters,” Angel One’s Managing Director Dinesh Thakkar said.
The company also named former Google Pay Vice President Ambarish Kenghe as its group CEO.
Angel One’s total client base rose nearly 52% in the third quarter ending December to 29.5 million.
The company’s total expenses increased 23.5% to 8.76 billion rupees.
It also raised brokerage charges during the quarter, including those on options and futures trading, to mitigate the impact of tighter regulations.
Angel One’s total revenue from operations in the third quarter rose 19% from a year earlier, while it fell 17% when compared with the second quarter.
The company said its share in India’s demat accounts, which allow investors to hold securities electronically, rose 196 basis points to 15.9% in the quarter from a year earlier.
($1 = 86.6530 Indian rupees)
(Reporting by Nishit Navin in Bengaluru; Editing by Shounak Dasgupta)
