Neutral Anand Rathi Wealth; target of Rs 2800: Motilal Oswal

Neutral

Motilal Oswal's research report on Anand Rathi Wealth

Anand Rathi Wealth (ARWM) reported operating revenue of ~INR3b in 2QFY26 (in line), up 23% YoY/9% QoQ, primarily driven by 28% YoY growth in revenue from the distribution of financial products and 16% YoY growth in MF revenue. For 1HFY26, it grew 19% YoY to INR5.7b. Operating expenses rose 16% YoY and 9% QoQ to INR1.6b, driven by 14%/21% YoY increase in employee/other expenses. Improved operational efficiency resulted in EBITDA of INR1.4b, up 32% YoY and 8% QoQ (in line), with EBIDTA margin at 46.2% vs. 42.9% in 2QFY25. For 1HFY26, EBITDA grew 31% YoY to INR2.7b. For 2QFY26, PAT stood at INR999m, up 31% YoY/6% QoQ (in line). PAT margin expanded by 215bp YoY to 33.6% (est. 34.7%). For 1HFY26, PAT grew 30% YoY to INR1.9b.

We expect a CAGR of 25%/22%/27% in AUM/revenue/PAT during FY25-28E, with robust cash generation (INR12.8b of OCF during FY25-28E), RoE of 37%+, and a healthy balance sheet. We reiterate our Neutral rating with a one-year TP of INR2,800 (premised on 42x Sep’27E EPS).

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Anand Rathi Wealth_15102025_Motilal Oswal