Anand Rathi Wealth Confident Of Beating Annual Guidance
Rathi saw record net inflows of Rs 1,400 crore and added 400 new clients in Q1.
Anand Rathi Wealth Ltd. posted the highest-ever revenue growth during the first quarter, and its management is confident of exceeding the annual guidance.
"We have achieved 25-28% of our annual guidance in Q1. So, our firm belief is that we should be able to not only meet but beat the guidance," Chairman Anand Rathi told BQ Prime’s Niraj Shah.
Rathi attributes the company’s performance to factors including record net inflows of Rs 1,400 crore in three months and an addition of 400 new clients.
The three lead indicators for the business—how much new money comes from clients, number of new clients, and trail revenue growth—are positive, Feroz Azeez, deputy chief executive officer at Anand Rathi Wealth, told BQ Prime.
The company had a trail revenue growth of 42%, which is greater than revenue growth of 36% overall, he said.
Key Highlights (QoQ Consolidated)
Revenue up 17% at Rs 131.6 crore
Ebitda up 20% at Rs 55.69 crore
Ebitda margin at 42.32% vs 41.13%
Net profit up 15% at Rs 39.7 crore
“We are well-poised for disrupting the wealth management business from a perspective of highly educated HNI families who take rational rather than emotional decisions," said Azeez. "When you look at our net mobilisation in equity during average lower Nifty levels, it is greater than in normal times.”
The digital wealth business is relatively new for Anand Rathi Wealth, and it's currently under development, Rathi said. It is aimed at “mass affluent” clients with an income of Rs 1-2 crore. It has achieved AUM worth Rs 1,000 crore, which the chairman termed as "reasonable".
The growth in the near-term for the digital wealth business may not be large, but from a long-term perspective of 5-10 years, it's a great business to be in, said Rathi.
The company has 271 relationship managers who are working at 60% capacity, Azeez said. “On an average, we have 28-29 clients per relationship manager. So, there is capacity utilisation headroom of a reasonable amount.”
During tough times, clients give preference to better wealth managers, which is a key reason behind the highest addition of clients this quarter, Azeez said.
“The relationship managers we wish to have are already under training, and we have 300 account managers who get promoted over a period of time to become relationship managers,” Azeez said.
According to him, as a listed company, the governance and transparency aspects improve which further serves as a catalyst for client acquisition.
Watch the full conversation here: