Anand Rathi Wealth Eyes 25% Growth Annually Over Next Decade, After Strong Q2 Earnings

Buoyed by a strong performance in the quarter ending September 2024, Anand Rathi Wealth Ltd. is eyeing a 25% year-on-year growth over the next decade, according to Deputy Chief Executive Officer Feroze Azeez.

Anand Rathi Wealth has posted a sharp 32% YoY rise in its consolidated net profit at Rs 76.3 crore in the September quarter. The company had posted a net profit of Rs 57.7 crore in the year-ago period.

Its total revenue for the period under review also surged 32% on annual basis to Rs 249.6 crore from Rs 189.1 crore in a year ago.

Speaking to NDTV Profit, Azeez said the focus will remain on strong client relationships. "Our current capacity allows us to handle 7,000 more clients without needing to hire additional relationship managers, thanks to our ongoing training of 400 apprentices who will soon transition into these roles,” Azeez said, adding, “We anticipate a consistent year-on-year growth of 20–25% over the next decade, which is sacrosanct."

With these projections, Anand Rathi Wealth aims to achieve an AUM between Rs 6 lakh crore and Rs 6.5 lakh crore in the next 8–8.5 years.

Azeez said, “This 25% growth translates to a tenfold increase over the next decade. We are particularly focused on maintaining a profit-before tax margin of 40% and a profit-after-tax margin of 30%. When we achieve a PBT above 40%, we will reinvest significantly back into the business.”

On the results and growth witnessed during the second quarter of the financial year 2024–25, Azeez added, “We have achieved a 57% growth in our AUM, which now stands at Rs 75,000 crore, up from Rs 47,000 crore a year ago. However, the more important barometer is the net inflow, which has reached Rs 5,700 crore in the first six months, averaging close to Rs 1,000 crore per month.”

This net flow underscores the company's ability to attract intergenerational wealth, with 57% of their assets currently invested in equity mutual funds, added Azeez.

Of the Rs 28,000 crore increase in AUM over the past year, he pointed out that around 40% can be attributed to actual fresh inflows, while the remainder consists of profits accrued by their clients.

“In the last six months, we have witnessed a 128% jump in collections compared to the same period last year, indicating strong investor confidence in our strategies,” Azeez added.

On the company’s stance on debt, he said, “We don’t focus on short-term assets. The prevailing opinion that the Reserve Bank of India will cut rates is overstated. Currently, the 10-year government paper is yielding 6.89%, while the three-year paper is at 6.56%. The flat yield curve indicates a more stable environment than many anticipate.”