Anand Rathi Wealth Limited

Anand Rathi Wealth Limited delivered its 19th consecutive quarter of consistent performance in Q1 FY27. The company reported a consolidated total revenue (excluding fair value gains and ESOP expenses) of ₹336 crores, marking an 18% year-on-year growth from ₹284 crores in Q1 FY26. Profit after tax (excluding fair value gains and ESOP expenses) increased by 24% year-on-year to ₹116 crores from ₹94 crores, with the PAT margin improving to 34.4% from 33% in the prior year. The mean Y-o-Y profit growth over the last 17 quarters stood at 31.7%, with a low standard deviation of 4.8%, underscoring the business's stability.

The company's total Assets Under Management (AUM) grew by 21% year-on-year, reaching ₹1,06,300 crores as of June 30, 2026. This growth was significantly supported by net flows of ₹2,743 crores during the quarter, including ₹1,900 crores from equity mutual funds alone. Anand Rathi Wealth added over 1,600 new client families on a net basis, bringing the total to 13,941. The client attrition rate, measured by AUM lost, was exceptionally low at 0.09% for Q1 FY27, and the company reported zero regret RM attrition, highlighting strong client and relationship manager retention.

Anand Rathi Wealth is actively pursuing strategic growth avenues. The Board has granted consent to apply for an AMC license, a move aimed at enhancing long-term wealth management capabilities. The company has also commenced operations in the UK, with expectations for it to contribute to financials soon, and is in the process of obtaining a GIFT City license. The Digital Wealth business saw its AUM grow by 23% year-on-year to ₹2,526 crores, serving 7,320 clients, while the OFA business platform now manages ₹1.66 lakh crores in assets for 6,890 subscribers.

For FY27, the company has achieved 24% of its full-year revenue guidance of ₹1,415 crores and 25% of its full-year PAT guidance of ₹460 crores. Management targets an AUM growth rate of 20-25%, driven by a combination of mark-to-market gains and net sales. A long-term aspiration is to achieve a 4% market share in the Category II mutual fund industry within 8-10 years, up from the current 1.5-1.75%. They also aim for monthly net sales of ₹1,100-1,200 crores over the next three years.

The company maintains a conservative asset allocation strategy, operating with a low-beta portfolio (0.6-0.65 Beta relative to Nifty) to mitigate risk. They primarily recommend mutual funds for diversified portfolios, avoiding direct equity recommendations due to higher beta. In structured products, they prioritize offerings from their group company, Anand Rathi Global Finance, over third-party products, viewing this as a derisking mechanism rather than a concentration risk. They explicitly do not recommend gold, citing India's existing high household savings in gold.

Management discussed the impact of regulatory changes, noting that while there might be some transmission of TER pressures to mutual fund distributors, their scale as a large distributor provides bargaining power. Regarding the RBI circular on bank guarantees, the company views it positively, expecting it to reduce market inefficiency and volatility caused by high-frequency traders, with a 'negligible or nil' impact on their derivative business. This suggests a stable outlook despite evolving regulatory landscapes.