Target: ₹3,100
CMP: ₹3,597.30
Anand Rathi Wealth posted an operating revenue of ₹290 crore in Q4-FY26 (in line), up 30 per cent y-o-y but flat q-o-q, primarily driven by a 35/24 per cent y-o-y growth in revenue from the distribution of financial products/MF. For FY26, it grew 22 per cent y-o-y to ₹1,150 crore. Operating expenses for Q4-FY26 grew 55 per cent y-o-y to ₹200 crore, with employee costs/other expenses growing 67/15 per cent y-o-y.
The management has guided for FY27 Revenue/PAT/AUM of ₹1,420 crore/₹460 crore/₹1.2 lakh crore, with the long-term growth trajectory remaining intact at 20–25 per cent. MF yields remained stable at around 1.09 per cent. Management indicated that the recent regulatory changes around TER (effective 1st Apr’26) are expected to have minimal impact (~2–4 bp) and are unlikely to materially affect profitability.
We have broadly maintained our earnings estimates for FY26, FY27, and FY28, as the company remains on track to meet its guidance.
We expect AUM/Revenue/PAT to expand at a CAGR of 22/20/20 per cent respectively, over FY26–28, with robust cash generation (INR8.3b of OCF during FY26– 28E), an RoE of over 35 per cent, and a healthy balance sheet.
We reiterate our Neutral rating, with a one-year TP of ₹3,100, based on 45x FY28E EPS.