Anand Rathi's numbers tell two different stories
Q1 profit surges 74% on a filing basis, but the call shows a slower, steadier business
The numbers
- Net profit jumped 74% YoY to ₹163 crore in Q1, on revenue of ₹322 crore.
- Assets under management grew 21% to ₹1,06,300 crore, crossing the ₹1 lakh crore milestone.
- The board approved an application to SEBI to sponsor a mutual fund, entering the asset management business.
- Net flows into mutual funds hit ₹2,743 crore, lifting market share to 2.47% from 0.18% at IPO.
Management's story
- PAT grew 24% to ₹116 crore, with margin holding at 34.4%, according to the earnings call.
- Zero RM regret attrition and client attrition of just 0.09% on AUM basis.
- Management guided for FY27 revenue of ₹1,415 crore and PAT of ₹460 crore, with Q1 achieving 24% and 25% of those targets.
- The mutual fund foray and UK operations are funded internally with no near-term profit expectations.
“We can grow for the next several years at 20-25%.”
— Feroze Aziz, Joint CEO
Where they diverge
The core divergence is in the profit figure itself. The filing declares a ₹163 crore net profit for Q1, up 74% year-on-year. The earnings call, however, discusses a PAT of ₹116 crore, which grew 24% and met guidance. The sources describe different profit metrics, creating a clear discrepancy in the headline performance narrative. One path shows explosive growth, the other shows a company tracking a steady, guided trajectory.
The full read
Anand Rathi Wealth's Q1 results present a tale of two profit figures. The filing reports net profit of ₹163 crore, a 74% year-on-year surge. The earnings call, however, frames the quarter around a PAT of ₹116 crore, a 24% increase that met the company's own guidance trajectory. This discrepancy defines the quarter's narrative. The more conservative call-based figure shows a business scaling steadily, not explosively. That steadiness is underpinned by exceptional client retention, with zero RM regret attrition. Management used the call to anchor the long-term story on a 20-25% growth rate and a new mutual fund foray, not on a single quarter's volatile profit number. The capital allocation toward the AMC license, UK, and Gift City is early and unprofitable, meaning costs will rise before any new revenue streams materialise. The open question is whether the filing's profit figure or the call's guidance-driven number will set the tempo for the year.
What we're watching
- Whether the mutual fund license receives SEBI approval, a prerequisite for the diversification bet.
- If the 24% of full-year revenue achieved in Q1 holds pace in subsequent quarters amid market volatility.
- The evolution of TER pressure, with Anand Rathi estimating a 1-3 bps pass-through versus industry pressure of 5-10 bps.