Angel One Limited (ANGELONE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q1 FY '27 Earnings Conference Call hosted by Angel One Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Hitul Gutka from Angel One Limited. Thank you, and over to you, Mr. Gutka.

Good morning, and welcome, everyone. Thank you for joining us today to discuss Engine's Q1 FY '27 financial and business performance. The recording of today's earnings call and the transcript will be uploaded on our website under the Investor Relations section. The financial results, investor presentation and the press release are also available on the website. For today's call, Angel One is represented by Dinesh Thakkar, Chairman and Managing Director; Ambarish Kenghe, Group CEO; Vineet Agarwal, Group CFO. We also have the senior leadership team of Angel 1, along with SGA IR consultants. The leadership team will give us a brief overview of the operational and the financial performance of the quarter gone by, which will be followed by a Q&A session. Please note that there may be certain forward-looking statements during the course of the call, which must be viewed in aggregate with the risks that the company faces. With this brief introduction, I now invite Mr. Dinesh Thakkar for his opening remarks.

Thank you, Hitul. Good morning, everyone, and thank you for joining us. When I look at India today, I see once in the generation opportunity for financial services. We are a nation of more than 1.4 billion people with nearly 1 billion people are working age, over 1 billion Internet connection, world-leading digital infrastructure and rising incomes. We had participation in formal investing retents law related to real size and potential. Our opportunity lies in enabling the hundreds of millions of customers who will enter a financial ecosystem for the first time, helping them progress from access to participation and ultimately pointing them towards long-term wealth creation. This opportunity extends well beyond the categories we operate today. As customers' financial needs evolve, they will increasingly look for integrated financial solution across investing, wealth, credit, protection and retirement. The platform that understand the customer best and fulfill their need responsibly will have a significant long-term advantage. We believe technology-led financial platforms will continue to have a lasting advantage. Every interaction on our platform generates valuable data. Every transition, query and decision helps us learn, adapt and improve. In our view, the winners over the next decade will not be simply those with largest customer base, but those with deepest understanding of their customer and the ability to convert that understanding into relevant trusted timely solution. That is why we remain in a continuous build mode because great intel business are built by compounding intelligence over time. As our platform matures, that intelligence compounds enabling more relevant customer experiences. This deepens engagement, strengthens trust and expands monetization opportunity across multiple financial products. This leads to higher retention, a better share of wallet and ultimately stronger customer lifetime value. As we expand into new customer segments, future cohorts do not need to monetize at the same level or at the same pace as earlier ones. What matters is that customers' lifetime value go through deeper engagement and increased cross-sell adoption, while our technology platform and scale continue to lower the cost to sell. Together, this creates a powerful flywheel, wider reach, deeper engagement, better unit economics and sustained profitable growth. Our progress in this quarter should therefore be viewed in the context of this long-term strategy. We are not simply building a fintech product. We are building a long-term financial ecosystem designed to participate in India's financialization journey for decades to come. With technology, data and customer first at its core. And we believe we are still only at the beginning. With that, I will hand it over to Ambarish to take you through our quarter 1 performance and key development during the quarter. Thank you.

Thank you, DT. Good morning, everyone. As DT highlighted, India is in the early stages of a multi-decade financialization journey. For us, the opportunity is not only about acquiring users, it is about building enduring relationships, deepening engagement and becoming the preferred platform across every stage of their financial life cycle. At Angel One, we continue to execute on this vision by strengthening our platform, expanding our product ecosystem and embedding intelligence into every user interaction. Every trade SIP, loan application, portfolio review, user query, et cetera, generate valuable data signals and insights. Over time, these signals create a powerful flywheel. Higher engagement leads to richer data, richer data power smarter AI and smarter AI enables more relevant experiences. This allows us to deepen relationships with them and compound value over time through greater engagement, retention and wallet share. Importantly, this model is not built around 1 product. It is built around the user's evolving financial gen. A user may begin their relationship with us through trading and investing later adopt mutual funds, see credit as their financial needs grow and eventually require wealth management and long-term asset allocation solutions. As they evolve through various stages of their life, there is a continuous requirement for new financial products, allowing us to deepen relationships and expand monetization at minimal incremental cost to serve. At the same time, the regulatory landscape continues to evolve. While we closely monitor these developments and remain agile in adapting to regulatory changes, our conviction in the long-term opportunity remains unchanged. Over the years, we have consistently demonstrated our ability to navigate market cycles and regulatory transitions while continuing to invest in technology, product innovation and user experience. Our strategy is built with long-term perspective. anchored in the structural growth of India's capital markets rather than short-term market conditions. Our financial performance this quarter reflects the resilience of this approach. Revenue for quarter 1 FY '27 grew 25.4% year-on-year to INR 14.3 billion. We maintained margins within our desired operating band post normalization of IP-related expenses and ESOP reversals during the period. Consolidated profit after tax increased 102.1% year-on-year to INR 2.3 billion, underscoring the strength of our diversified business model and disciplined execution. Today, with over 38 million registered users, we are already seeing this play out. Broking continues to be a powerful gateway product with nearly 60% of our mutual fund clients engaging with us first through our broking services, while a meaningful proportion of mutual fund first customer subsequently participated in broking activities. This ability to create multiproduct relationships has helped us achieve our lifetime best average client funding book of INR 61.4 billion, sustain a 22.2% turnover market share in equity derivatives and improve our cash equity turnover market share to 17.4%, while maintaining a 20.2% share of overall retail equity turnover, reflecting the strong affinity users have for the Angel One platform. During the quarter, we continued to scale AI across both the user and operating stack. As Angel has evolved into a conversational assistant powering discovery, engagement and support journeys serving over 1.1 million users and addressing queries in finance and support. Beyond user-facing experiences AI is embedded across user onboarding for face match, real-time signature validation, grievance and ticket automation, content generation, software development, analytics and portfolio intelligence. In addition to enhancing user experiences, AI is also enabling us to scale more efficiently by automating workflows and improving decision quality. As these capabilities continue to mature, we believe AI will increasingly become a source of both operating leverage and competitive differentiation. Our Al-led decisioning capabilities are increasingly driving both engagement and monetization. In credit, our propensity models, probability of default scorecards and lender approval engines enable intelligent user segmentation, richer engagement and more relevant product matching, leading to 130% year-over-year growth in our credit distribution to INR 5.3 billion. With only a small share of our customers having ever avail credit through the platform, we see a significant embedded monetization opportunity across our ecosystem. The same platform advantage extends into our wealth management business where our technology-led experience continues to gain traction. Ionic wealth tech AUM crossed INR 32.3 billion, while the UHNI segment expanded to 263 families with an AUM of INR 87.3 billion. Across the broader franchise, total AUM grew 33.3% to INR 134.4 billion dominated by recurring revenue linked assets. Asset Management business also continues to business momentum with its AUM crossing INR 6.2 billion. Over time, we believe this business will become an integral part of our broader investment ecosystem, complementing our existing offerings and strengthening customer engagement. As we scale, security remains foundational. Trust is the currency of all fintech platforms. We continue to operate with a security by design approach, supported by ISO certified systems compliance and study CSR framework and alignment with evolving digital privacy standards. Through multiple layers of control, governance, monitoring, encryption and authentication, we remain focused on safeguarding the interest of all our stakeholders. We are also at the forefront of safeguarding our users from AI-driven risks in the post metros era. As financial relationships deepen and AI becomes more pervasive, we believe trust, security and responsible use of data will increasingly become competitive differentiators. To conclude, our strategy remains robust. Deepen engagement, expand product adoption, grow wallet share and leverage intelligence to create superior user outcomes. Increasingly, we see Angel One evolving into an intelligent AI-powered fintech that accompanies users through every stage of their financial journey. Our technology capabilities are founding. Our platform word continues to strengthen and we believe we are exceptionally well positioned to participate in India's vast financialization opportunity for many years to come. I'll now hand it over to Vineet, who's our group CFO. Thank you.

Thank you, AK. Good morning, everyone, and thank you for joining us. Quarter 1 of this financial year was another quarter of healthy execution for the company. While market activity moderated sequentially across the industry, our diversified business model once again demonstrated its resilience, enabling us to deliver healthy profitability maintain margins while continuing to invest for long-term growth. Consolidated revenue, gross revenue for the quarter stood at INR 14.3 billion, growing 25.4% year-on-year while moderating 2.3% sequentially, largely reflecting softer trading activities across the capital markets. We processed 406 million orders during the quarter with the moderation primarily driven by lower derivative volumes, broadly mirroring industry trends rather than any change in our competitive positioning. Importantly, our revenue profile continues to become increasingly diversified, while our core trading platform remains our largest acquisition engine, contributing close to 60% of our gross revenues, the remaining 40% now comes from complementary businesses such as client funding, distribution, depository, wealth and other asset management businesses. This diversification is steadily improving the resilience and quality of our earnings profile. Interest income remained a key contributor during the quarter, accounting for 32.6% of gross revenues and growing 2.6% sequentially to INR 4.7 billion. This was supported by continued growth in our average client funding book to INR 61.4 billion, while the period-end book reached a record of INR 71.5 billion, reflecting increasing client engagement and deeper adoption of our financing solutions. Distribution income moated sequentially, owing to seasonally softer insurance sales and muted credit disbursement. While distribution currently contributes about 3% of revenues, we continue to see significant long-term opportunity across lending, insurance, wealth and investment products as client relationships deepen. Let me now turn to profitability. Reported consolidated EBITDA for the quarter stood at INR 3.6 billion, translating into a reported margin of 32.7%. And sequentially, profitability was primarily influenced by 4 largely seasonal or time-related factors, moderation in market activity, annual employee increments and variable pay accruals fresh so grants during the quarter and higher IPO-related banking expenditure concentrated in April and May of this quarter. These impacts were partially offset through disciplined control over acquisition and operating expenses. More importantly, adjusting for these seasonal items, our normalized DAT margin stood at 4.6% and compared with 44.4% in the previous quarter, remaining comfortably within our guided operating range. I believe this is the more meaningful measure of the business. It demonstrates that our core franchise continues to generate strong operating leverage even as we consciously invest for the next phase of growth. Our newer businesses, particularly wealth management, asset management and distribution remain in the investment phase, but we are building them with the same financial discipline that has defined our core business. We continue to balance growth investments with profitability, ensuring that these businesses scale responsibly without diluting the overall return profile of the company. Consolidated profit after tax stood at INR 2.3 billion, representing 102% year-on-year growth, while a trailing 12-month pack to INR 10.3 billion and EPS of INR 11.4. Profitability continues to compound faster than revenues, reflecting the scalability of our platform and disciplined execution across businesses. I'm also pleased to say that the Board has approved our first interim dividend for this financial year of INR 1 per share with the record date being July 21, 2026. Our balance sheet remains one of our strongest competitive advantages. Net worth increased to INR 64.2 billion, while borrowings reduced meaningfully during the quarter despite continued growth in our funding book. The temporary increase in borrowings at the end of the previous quarter was entirely related to the 1st April banking holiday and has since normalized. Equally important is the quality of our assets. 83% of our client funding exposure is below INR 100,000 per client, while 85% of the portfolio is less than 30 years old supported by fully collateralized client holdings and negligible delinquency. Our capital allocation philosophy remains consistent and disciplined. We continue to deploy capital selectively into businesses where we see long-term structural opportunities while maintaining a strong balance sheet, healthy cash generation and prudent risk management. We are not pursuing growth at the expense of returns while investment is evaluated through the lens of scalability, profitability and long-term shareholder value creation. Stepping back, I believe 3 things stand out from this quarter. First, our business model is becoming increasingly diversified with nearly 40% of our revenues now coming from businesses beyond core broking, making earnings profile more balanced and resilient. Second, our core operating engine continues to demonstrate strong operating leverage allowing us to absorb normal seasonal cost cycles while sustaining margins. And third, we are investing in the future with discipline. Our newer businesses are scaling steadily, but importantly, they are being built without compromising profitability, balance sheet strength or capital efficiency. Taken together, these give us confidence that we remain well positioned to deliver sustainable and profitable growth over the long term. With that, let me hand over back to the -- for the questions. Thank you.

[Operator Instructions] The first question comes from the line of Prayesh Jain with Motilal Oswal Financial Services Limited.

Congratulations on a good set of numbers. Firstly, on the credit side, what has caused the slowdown? It's been kind of dipping over the past couple of quarters. What kind of -- what's happening there at Q3, we had disbursed about INR 110 crores, then INR 210 crores and now INR 530 crores what kind of transpiring there the credit growth in the industry seems to be very strong, but we've been kind of seeing the case trends out there. And how should we think about it? Because you spoke about the potential of it, but it's kind of been slowing down? That is point number one. Point number 2 is on the broking side of the business, what is the kind of expectations you have from the -- as the current trajectory definitely for the month of July started on quite a weak note probably because of volatility or whatever the implications of BT would have on the overall industry, the second order impact would have happened on us. How do you see it kind of playing out in the next couple of quarters? And how should one read into the current weakness in the volumes. Third would be on your Wealth Management business. Any color on again, and I ask this every quarter, but not getting these numbers, but anything on revenue that the segment accounts for, cost, what's the kind of cost that's been incurred? And lastly, if I compare the top management and particularly AMC, we've seen a massive churn in your top management. How do you see this business AMC, in particular, going ahead? And what are the plans out there?

Prayesh, we'll start run by 1 as you went on the credit side, I shortly hand it over to Saurabh, but I think you have to look at specialty credit business in the long term, if you see year-over-year, there's a 130% increase. After I'll hand it over to Saurabh to provide a little bit more commentary on that.

So you see January disbursals in the quarter is driven by a combination of factors, your customer sentiment, lender underwriting and pricing and customer experience on the platform are the important ones. Over the long term, all of these do pan out. But in the short term, some of these can create some impact. We, however, continue to work with our lending partners to improve conversion and strengthen the customer journey in our very confident that the actions we are taking put us in a much stronger position to improve growth going forward. Having said that, our long-term thesis remains completely unchanged. We continue to see a very, very large opportunity in credit within the Angel ecosystem itself. We have a very large engaged customer base, strong proprietary data and significant headroom to deepen credit penetration. Our focus is actually on building a scalable, high-quality business with strong unit economics and scalable lender partnerships rather than optimizing for every single quarter disburse. And we actually believe this approach will create much larger and much durable business over the long term.

Yes. On the broking pen you talked about. I'm assuming you're talking about the industry retail Look, I think we've seen 15 days of July. So too early to think about anything. The way we think about it is really in a year's time frame, nothing fundamental has changed about India, if anything, we deal for a big growth. So there is no -- I don't think there is anything to read into that one. On the wealth management side, I'll hand it over to Srikanth to talk about it. Srikanth?

Yes. Look, we put as 1 of the more important metrics as far as we is concerned, is to build. High-quality asset management like asset under management led kind of a business. And that's why 1 of the key focus that we put in order to focus on that to have a very ARR-led AUM because in this kind of market as we are all aware, it's easy to -- given the citation of getting AUM, which is very high on onetime transactional revenue, which actually puts a lot of pressure on building a long-term sustainable is. So I think as an experience -- all of us are brutally focusing on building the best management from where not only are the assets growing at a very healthy rate, but the assets are growing significant focus on as a corresponding revenue to that. For us, what is also crucial is the unit economics are something that are starting to fire. It's been about 5 or meaningful quarters after we started our business. And hence, 1 of the reasons why we focus more on parameters such as AUMs and caustic economics and unit economic metrics is to the building blocks. We've always maintained that we have a plan that we are working with, which gives us about 3, 4 years in terms of having a more potential breakeven visibility. And at this point in time, all parameters are pointing towards that region. So that's the approach with which we are building ratio.

Thanks, Srikanth. And I think on the AMC question, I'll invite Amit Majumdar to talk about it.

Yes. On the AMC look, I mean, for us, AMC is an important capability. And within our wider wealth ecosystems. Our objective is to obviously build products that are simple, relevant and digitally distributed while leveraging the strength of our customer base and technology platform. At this stage, our focus is on building the right foundation and strengthening our product suite, distribution capabilities and customer experience. So you should think of the AMC as an important strategic investment that complements our platform and deepens customer engagement over time. So we will continue to evaluate opportunities across the spectrum, but our philosophy remains to build where we believe we can create genuine customer value. and differentiate through digital distribution and technology.

I get that, Amit. Just 2 things. One, what has so far not gone right? It has been some time that we have launched the AMC and we have hardly scaled up any AUM. And second, on the credit part, again, where you mentioned that -- what has not worked for us in the last 6 months, whether it is our platform, whether it is our relationship with the banks and with the partners, basically? Or what has not gone right that what has not worked for us that we gone down by almost like, say, 30-odd percent from the peak. So what has not really worked for us?

I'll pick up the AMC piece first and then let Saurabh of explain the credit part. Look, as all along has been a passive-only approach for us at the start. Passive businesses take a long time to mature. We started this about 15 months ago, not too long ago. And in that sense, passive grows as content grows as educations grow. And if you know, passive is largely sold as a DIY on digital platforms. So the first 15 months has actually been to ensure that we roll out the right kind of products. Today, we have all the products that we need, the most important ones that we have already rolled out. And these have all got rolled out over time. In fact, most of the product rollout happened in the last quarter of the last fiscal. So this takes time for it to build. And while we are building the passive, we also recognize the fact that as an AMC, and given the length and breadth of the product suite that is available for us to explore, we are looking at how to further expand this portfolio. beyond what we are currently doing in passive. So it's very early for us to actually comment on the performance as of now. But we are confident that over the next 3 or 4 quarters, we will have far greater visibility on our real strategy on the AMC front. On the credit, Saurabh.

Yes, please, just to expand on what I had said earlier. I think there are 2 or 3 things which could have gone better. But in general, I think lenders keep calibrating their risk and their pricing on our base over time. So quarter-over-quarter, some of these do impact our disbursals Secondly, as well, I mean, since you work with lenders and who in turn work with a lot of tech partners themselves for underwriting and for KYC, et cetera. So some friction in those parts of the funnels also do impact in the short term. But some of these are -- have been identified and in the process were getting corrected. So we don't see any short-term to midterm blip in the credit growth. In the long term, we are actually very, very bullish on the same. I won't trash won't read too much into the quarterly gyrations. -- very long-term business. You will see it.

Mr. Jain, are you done with your questions?

Yes, yes.

Next question comes from the line of Swarnabha Mukherjee with 360 ONE Capital.

Just 2, 3 questions. First, on the industry volume side, sir, I just wanted to understand that how you were at the current run rate, seeing the broking volumes? So like in the first 15 days of July, how are we seeing the broken volume, particularly on the derivative side? And do you see any impact of the car second order impact on your numbers, if you can highlight that if there is any possibility of a spillover effect that might come through, although I understand that we are not we do not do the prop trading part. But if any spillover effect is coming, if you could highlight. That is one. And secondly, I wanted to understand also on the run rate, how are we seeing as we move in the first 15 days of July? If you could give some color on that. Because I think at the industry level, it looks different. So any color would be helpful. Thirdly, on the cost front, sir, I wanted to understand that -- I mean, our employee expense, the flattish trend despite the increment. So how should we think about the employee count as it kind of degrown over this period? Or I mean, if you can give some color on that. And on our quarterly in terms of our customer acquisition cost, you have mentioned that the acquisition cost has been lower this quarter. Would you mean in terms of the per client acquisition cost? Or is this a function of lower number of customers acquired vis-a-vis [indiscernible].

Thanks, Swarnabha. I think on the first 2 questions, really, we don't -- we again talk about the quarter after it is done. So the first 15 days, I wouldn't -- you can look at the industry volumes. We continue to monitor our market shares and those situations, but we don't comment on them in the middle of the quarter. So I wouldn't want to talk about that. Maybe Vineet, do you want to talk anything about the RBI circular at all because I mean, it's really hard to say hard for us to predict that.

No. I mean, we are not seeing any kind of a liquidity issue as far as the funding position is concerned. So I mean, I think this is something which is transient and over a period of time will even out. .

Any thoughts on the employee cost, you want to talk about employee costs and the number of employees?

Yes. So Swarnabha, if you recall in the conversation that we were having in April. I had mentioned that we would be more or less flat as far as our employee cost is concerned vis-a-vis the last financial year. So in the last financial year, we were at about INR 11 billion for the entire year, including the cost for stock options. My sense is that we will be in that similar range in this year. And it's a bit early to give you a complete sense, but the way I'm looking at the business we will be in the range of about INR 11 billion as employee cost for the year.

But I think across the board, you'll see that as we grow, we want to continue to drive the business efficiently. On the CAC, I don't think we comment on the CAC itself, Overall, you may see some changes in the total acquisition cost, and that is just dependent on how rich the market is in terms of acquiring the customers, but we don't comment specifically on the CAT itself.

Right. So sir, just wanted to understand, I don't want any specific number in terms of the CAC. I just wanted to understand that your presentation comment as at an overall level, at the total cost level or at the unit first level of acquiring 1 customer.

Swarnabha, it was at a total acquisition cost level.

[Operator Instructions] Next question comes from the line of Raman KV, [indiscernible].

I have 2 questions. One is from the presentation and from the numbers, what can we see that our distribution revenue has declined over the past 2 quarters as a percentage of gross revenue. So can you -- is there any headwinds that we are facing in the distribution business? One is that. And second is with respect to client funding book, which has grown substantially current quarter, so I just want to understand what is the risk of this client funding book at the company level, if there -- if the market for next 2 quarters turn doesn't perform or the market takes a dive down town?

Raman, thanks for the questions. The distribution revenue, some of these quarterly durations that you've seen are also because of the insurance distribution business because Q4, as you know, March tends to be very, very, very strong. in that business. So I wouldn't read too much into it. We talked a bit about our lending business, but beyond that, not much. I think it's a very strong business. We continue to have great momentum there. So we do think we'll -- you will see more momentum on that business. So -- on the MTF on the client funding book, there is actually a very, very limited risk to us because we have exchange prescribed margins and sometimes we go over and above that as well. So we stay quite safe. But Vineet, do you want to comment anything else on the risk?

I think as I've been mentioning the risk management system remains a strong backbone for any broking entity and especially for the client funding related activities, we have a very strong risk management framework and if you see in the past also, there have been instances where the markets have been flattish or there are events that have resulted in sharp decline in the market, but we haven't seen any kind of issue. As far as the momentum is concerned, there are multiple factors which drive the momentum, including movements in the market. I think the overall penetration at this point in time amongst our client base is pretty low. And therefore, we a long-term strong growth opportunity in the client funding segment. And therefore, we are very bullish about it.

Understood, sir. And sir, my final question is on the AMC business. has grown substantially over the last -- like I think since we have launched, we have been able to grow this business at 80%, 90%. So I just want to understand what's our long-term vision. Is there any internal target of reaching 100 million AMC AUM at an annual term?

[indiscernible] will take that question.

Raman. So look, I mean, we, of course, we have set some targets for ourselves. And while until so far, our AMC has been primarily a passive AMC. But over time, we have been trying to figure out ways in which we want to expand this beyond what we are currently doing. And we did have -- we do have an expectation on the AMC over the next few years. But obviously, we cannot say that now because these are all in the works as of now. I'm sure you will hear more about this over the next couple of quarters. .

[Operator Instructions] Next question comes from the line of Neeraj Toshniwal with UBS.

So initial active client base, we see some decline on the -- and obviously, an acquisition is also been a little slower. So just wanted some sense how given the July activity has also started to be muted. How should 1 think about overall the trajectory in that change the target for full year? .

Look, I think the client base, as you know, tends to be overall a 12-month metric. So depending on what has happened during those 12 months, that metric will sometimes move month-to-month. We continue to focus on getting a good client base, acquiring a good set of customers when they are available. And we keep monitoring as well as figuring out which level we want to acquire clients that we're acquiring at a fairly good market share in terms of -- when you look at our market share, we continue to acquire at a high market share there. So as -- and especially -- some of these are also dependent on market conditions. As you see perhaps more IPOs when people get interested as you see some more activity in the NIFTY, right? I think that's also been quite flat. You'll see more investors come back in and that should start showing you good numbers. At the same time, I think we continue to be quite strong if you look at the ranking on the active. So it continues to be here strong and we think in the future, you'll rise from there.

Okay. And in terms of the overall target and the aspiration for 40%, 45% margin that kind of is of the well run down what we are having every quarter. So there's no change in project there, right?

I mean no change in that. You can actually see the -- you can see that quarter-over-quarter, we've been actually doing that. And we -- just to be clear, when we give you then you give -- when we give you that guidance, we always talk about the stand-alone margin. But overall consol also, I think you see our margins have been fairly healthy. This quarter, of course, because of IP and other adjustments, you have to look at it on an adjusted basis and that 45% to 50% margin guidance remains intact.

Got it. And lastly, again, on the distribution, but as you mentioned that it will pick up and you have confidence in that. Just wanted some sense any seasonality here only Q4 has generally more towards distribution side in later part of the year. But are we seeing some trends in terms of or doing something different to make it improve from here? .

So Neeraj, I mentioned earlier, definite seasonality, especially in insurance, you see definite seasonality there. on lending, we talked about it, you will see it rise from there. Actually, where we want to go compared to that, we are at a small base. So you will see it rise from there. Also very small number of our customers have ever taken loans from us. So you will see definite momentum in those areas. But again, we don't think of especially a business like lending, you don't want to think of it quarter-over-quarter. It's really important to grow it responsibly. And so we look at a very long-term view of that, we have a fantastic set of [indiscernible] partner. All of them are growing. So you will move on there.

[Operator Instructions] The next question comes from the line of Nidhesh Jain with Investec.

My first question is on the -- slightly on the wealth management for the existing kinds of Angel One platform. So if you look at our AUC of stock is very high at INR 1 crore but mutual fund assets that these clients are managing on your platform is quite low at I think around INR 20,000 crores. So how do you plan to, first of all, increase the engagement from a mutual fund perspective? And secondly, how do you see monetization of the AUC of stock that your clients are managing in terms of stock advisory or anything else. .

So I think we are actually seeing momentum in mutual fund. It's an important business to create a well for our investors. And so 1 of the metrics that we look internally at is just how many active ships and what is our share of that. And across the board, we are seeing definitely that do well. for us. You will see a few things here that will change the momentum further. One is, I think starting to make sure that people can get their questions answered and you will see momentum on that front. We are also improving U.S. and to make the visibility even better -- also on the assisted business side, we have a focus on mutual fund distributors, so you're going to see value on that front also. So we are seeing momentum and there is more momentum coming on that front for sure.

And then to offer stock advisory, et cetera, to -- for the clients to manage their investment in stocks better.

Look, not at this time. We do -- of course, we have RA and we provide calls, as you know, those are different. But no plans on the stock advisory on. We, of course, have Ionic, which is our sort of wealth management business so people can sort of have a full solution set there. on that front.

Sure. So in terms of AP channel, what is the count of fact that you have as of June '26. Secondly, in that channel, I think we had plans to scale up loan distribution, mutual fund distribution and other financial service distribution. So what is happening there? Any data that you can share? .

I'll let Nishant take that question.

Count of AP was the question, I guess. So it should be around 9,800 at this point, activities.

Probably approximately I think of the number of about 10,000 is what you should think of. And I think your next question was about mutual fund distribution. Yes. So we have very aggressive clients -- we have clients around...