Shares of Angel One Ltd soared around 11 per cent in Tuesday’s trading, as better-than-expected operational efficiency led to a higher profit in the September quarter. The stock soared 10.65 per cent to a high of Rs 3,011.65. With this, the stock has reduced its year-to-date losses to 17 percent. MOFSL maintained its “Buy” rating on the stock ahead of today’s call.

Angel One reported a 39.14 per cent increase in year-on-year profit to Rs 423 crore. It exceeded MOFSL estimates by 5 percent. The 29 percent year-on-year growth in gross brokerage business is driven by growth in the F&O segment (up 23 percent year-on-year) and cash segment (52 percent year-on-year).

Net interest income stood at Rs 2.8 billion, up 83% year-on-year, which was in line with expectations. The average customer financing portfolio stood at Rs 3,890 crore compared to Rs 1,410 crore in the year-ago quarter. Other income also increased by 57 percent.

MOFSL said Angel One has demonstrated its ability to protect profitability by taking corrective pricing actions to offset the impact of on-label fee regulations.

The impact of new F&O regulations for index options – in which the number of weekly expiries will be limited to one per exchange and lot sizes will be increased from Rs 15 lakh to Rs 20 lakh, along with other measures – should have an impact on volumes.

“Angel One will decide on its pricing action to offset the impact of these measures after implementation. Nevertheless, the company maintained that in the long term, margins would be reduced to 45-50 percent. Furthermore , new businesses such as distribution “Lending, fixed deposits, wealth management and AMC are expected to gain traction in the medium term,” he said.

For now, the brokerage has suggested a “buy” on the stock, but said it will revise its estimates after today’s conference.