Neutral Anand Rathi Wealth; target of Rs 2100: Motilal Oswal

Neutral

Motilal Oswal's research report on Anand Rathi Wealth

Anand Rathi Wealth (ARWM) reported operating revenue of INR2.7b in 1QFY26, up 15% YoY/24% QoQ, primarily driven by 27% YoY growth in MF revenue. Revenue exceeded our estimate by 12%, led by a 23% beat in revenue from the distribution of financial products, while MF revenue was in line. Opex rose 5% YoY/12% QoQ to INR1.5b in 1QFY26, driven by a 6% YoY increase in employee costs, while other expenses grew 3% YoY. Improved operational efficiency resulted in EBITDA of INR1.3b, up 30% YoY/41% QoQ, with EBITDA margin expanding to 46.6% from 41.3% in 1QFY25. 1Q PAT grew 28% YoY to INR939m (35% beat), driven by better-thanexpected revenue. PAT margin expanded by 335bp YoY to 34.3% (est. 28.5%). The company is on track to meet its FY26 guidance, as it has already achieved 25% of its full-year PAT target and 24% of its revenue target in 1QFY26. It is also just 14% short of reaching its INR1t AUM goal.

Outlook

We expect a CAGR of 24%/22%/28% in AUM/revenue/PAT during FY25- 27E, with robust cash generation (INR9.2b of OCF during FY25-27E), RoE of 40%+, and a healthy balance sheet. We reiterate our Neutral rating with a one-year TP of INR2,100 (premised on 36x Mar’27E P/E).

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Anand Rathi Wealth - 14072025 - moti