India's retail investors are reshaping the market. According to the National Stock Exchange, it saw 8.4 million new demat accounts, a 20.5% y/y jump in 2025.

Angel One, a digital stockbroking platform that lets retail investors trade shares, derivatives, mutual funds, and other financial products, alone added
1.46 million of them. Trading volumes stayed strong even as equity markets turned choppy. Its active user base now stands at 7.57 million (about a 15.4% market share).

However, the story isn’t that simple anymore, with fierce competition amongst brokers. Pricing power is weak, customer loyalty is thin, and product differentiation is limited. Most platforms offer low brokerage and fast onboarding. That keeps growth alive, although makes it harder to protect margins.

At the same time, regulatory tightening around derivatives trading is starting to bite. Higher compliance costs, potential curbs on speculative activity, and rising tech spending mean the cost base isn’t as light as it once was. Growth now depends less on easy client additions and more on extracting value from existing users.

Angel One is trying to move beyond just stock trading into mutual funds, loans, and wealth products to make its earnings more stable over time. That helps the long-term story, although execution matters. Not every trader converts into a long-term investor.

Angel One is still riding India’s investment trend, although the phase of effortless growth is fading. From here, discipline, and not just volumes, will decide who really wins.

Losing ground

Angel One’s FY 26 numbers tell a story of slowing momentum rather than smooth growth. Revenue slipped 1.9% y/y to INR 51.4bn ($530m), down from INR 52.4bn in FY 25, as trading activity cooled and client additions slowed.

Profits took a bigger hit. Net profit fell 21% to INR 9.2bn, down from INR 11.7bn a year ago, highlighting how sensitive the business is to changes in trading volumes.

The Derivatives segment remained the company's backbone. That’s part of the problem. The business still leans heavily on options and intraday trades, which are volatile and increasingly under regulatory scrutiny.

Liquidity is also weakening. Cash and equivalent collapsed to INR 1.6bn in FY 26 from INR 7.6bn in FY 25, reducing the cushion.

The bigger concern is structural. Growth is no longer driven by easy onboarding or speculative trading.

Growth with a side of friction

At INR 319.7, the stock is up 14.1% over the past year, although still below its 52-week high of INR 334.9, suggesting the market hasn’t fully bought into the growth story.

Valuations show that hesitation. With market cap of INR 279.9bn ($2.9bn), the stock trades at a FY 27e P/E of round 21.3x, broadly in line with its 3-year average of 21.5x. That’s not cheap, although it’s no longer demanding a premium. It looks more like a wait-and-see zone than a strong conviction bet.

Analyst sentiment is generally positive, although not unanimous: 8 out of 10 analysts have “Buy” ratings on the stock while two are on “Hold”. Their average target price of INR 352.7 implies 16.1% upside potential, which sounds decent, but doesn’t reflect extasy amongst them.

Management still has work to do to prove growth can hold and justify stronger re-rating from here.

Story under stress

The real pressure point is falling profitability, showing how quickly earnings drop when trading activity slows. The business still depends heavily on the derivatives segment, making it vulnerable to tighter regulations and shifts in retail behavior. If traders pull back, the core engine weakens fast.

Competition also remains intense, with low switching costs limiting pricing power. At the same time, rising tech and compliance costs add pressure. Liquidity is weakening, reducing the buffer just as conditions turn uncertain.

Angel One is no longer riding an easy boom. It now has to prove it can handle a tougher, slower, and more regulated market.