Anand Rathi Wealth Reports 32.4% YoY Rise in Q2 Net Profit to ₹76.1 Crore
Team FS
10/Oct/2024
What's covered under the Article:
1. Anand Rathi Wealth reported a net profit increase of 32.4% YoY, reaching ₹76.1 crore in Q2 FY25.
2. Revenue from operations rose by 32.8% to ₹242.5 crore, reflecting strong performance in mutual fund distribution.
3. The company declared an interim dividend of ₹7 per equity share, marking significant shareholder returns.
Anand Rathi Wealth Ltd, a prominent non-bank wealth solutions provider, showcased impressive financial performance in its recently released Q2 FY25 results. The company reported a 32.4% year-on-year (YoY) increase in net profit, amounting to ₹76.1 crore for the quarter ending September 30, 2024. This marks a significant jump from the ₹57.5 crore net profit reported in the same quarter of the previous fiscal year.
Financial Highlights
The company's revenue from operations saw a robust growth of 32.8%, reaching ₹242.5 crore compared to ₹182.6 crore during the same period last year. Such growth underlines the firm's effective business strategies and its ability to capitalize on market opportunities.
At the operating level, EBITDA (earnings before interest, tax, depreciation, and amortization) recorded a 34.5% increase, amounting to ₹104.2 crore, up from ₹77.5 crore in Q2 of FY24. The EBITDA margin also improved slightly to 43%, compared to 42.4% in the corresponding quarter last year, reflecting efficient cost management.
Mutual Fund Distribution Revenue
A notable highlight from the report is the 70% year-on-year rise in mutual fund distribution revenue, which surged to ₹195 crore. This success is indicative of Anand Rathi's increasing market penetration and client engagement. Additionally, the net inflows from mutual funds rose dramatically, achieving a remarkable 128% increase to ₹5,700 crore.
Equity mutual funds specifically saw a 64% growth in net inflows, totaling ₹3,116 crore. Furthermore, the share of equity mutual funds in Assets Under Management (AUM) climbed to 55% as of September 2024, up from 50% in September 2023, emphasizing a shift towards equity-oriented investments among clients.
Return on Equity and Dividend Declaration
Anand Rathi Wealth reported an annualized return on equity (ROE) of 44%, a robust indicator of the company's profitability and efficiency in utilizing shareholders' equity. The board has declared an interim dividend of ₹7 per equity share, representing 140% of the face value of ₹5. This move not only rewards shareholders but also signals confidence in the company's ongoing growth trajectory.
Leadership Commentary
Rakesh Rawal, the Chief Executive Officer, expressed his optimism regarding the company’s performance, stating, “In H1 FY25, our total revenue grew by 35% year-on-year to ₹495 crore, and profit after tax reached ₹150 crore, also representing 35% growth year-on-year. Our AUM has seen a significant increase of 57% to ₹75,084 crore. We welcomed 1,066 new client families, bringing our total client families to 10,977.”
Feroze Azeez, the Deputy Chief Executive Officer, noted that during the first half of FY25, the company’s total net inflows registered a remarkable year-on-year growth of 128%, amounting to ₹5,700 crore. He further highlighted the successful client-centric approach, which has resulted in a low 0.28% client attrition rate concerning AUM lost during the first half of FY25.
Market Response
Despite these positive results, shares of Anand Rathi Wealth Ltd closed at ₹4,040, down by ₹77.45, or 1.88%, on the BSE following the announcement of its earnings. This reaction indicates the market's anticipation of sustained growth, coupled with external market conditions that may have influenced investor sentiment.
Conclusion
In summary, Anand Rathi Wealth's Q2 FY25 results reflect a strong growth trajectory, supported by increased mutual fund revenues and a growing client base. With a focus on enhancing client relationships and effective wealth management solutions, the company appears well-positioned for future growth. Investors looking to stay updated on the latest in wealth management and investment opportunities can visit our Best IPO to Apply Now - IPO List 2024 for the latest updates.
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Anand Rathi Wealth's impressive results signal a promising outlook for investors and clients alike, and their continued focus on growth and client satisfaction remains a cornerstone of their business strategy. Stay tuned for more insights and updates in the wealth management sector.
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