Anand Rathi Wealth: 35% PAT growth & 35% revenue growth in H1-25 at a PE of 63
Guidance of 35% PAT & Revenue growth in FY25. FY25 guidance revised upwards, yet looks conservative. Tailwinds of rising HNI population seeking wealth services leading strong inflows into equities
1. Why is ANANDRATHI interesting?
anandrathiwealth.in | NSE: ANANDRATHI
ANANDRATHI is performing strongly, achieving consistent PAT growth of over 30%. This success is fueled by India’s emergence as the fastest-growing economy in FY25, which has led to an increasing number of high-net-worth individuals (HNIs) looking for strategic wealth creation approaches. Additionally, equity markets are seeing record-high inflows, with new investments rising month after month.2. India’s leading wealth firms, catering to HNI & UHNI individuals
3rd largest non-bank sponsored mutual fund distributor in India
3. FY19-24: PAT CAGR of 31% & Revenue CAGR of 22%
4. Strong FY-24: PAT up 34% & Revenue up 35%
5. Strong Q2-25: PAT up 32% & Revenue up 32%
6. Strong H1-25: PAT up 35% & Revenue up 35%
7. Strong return ratios
8. FY25: PAT growth of 31% & Revenue growth of 30%
FY25: Guiding for a slow down in growth momentum in H2-25 compared to H1-25 is indicative of either a very conservative guidance or the management knows something which we don’t know.
9. PAT growth of 35% & Revenue growth of 35% for H1-25 at a PE of 63
10. Do I stay?
If I hold the stock then one may continue holding on to ANANDRATHI
Coverage of ANANDRATHI was initiated after Q2-24 results. The investment thesis of strong growth has not changed after a strong Q1-25. The management has revised its guidance upwards for FY25 after a strong H1-25.
The upward revision in FY25 guidance while positive is either conservative or indicating a weaker H2-25 compared to H1-25. One needs to keep quarter to quarter watch on ANANDRATHI to protect against any weakness in performance.
The underlying business momentum and execution in ANANDRATHI is strong
Given the 35% top-line & bottom-line growth rates in H1-25 the guidance for 30% growth in top-line & bottom line looks conservative. One can take a quarter by quarter view on ANANDRATHI and see if it beats its guidance in FY25, the way it did in FY24
ANANDRATHI is the middle of a strong run in the business where PAT has grown at 30%+ YoY for the last 6 quarters. One should continue with ANANDRATHI as long as the strong run continues.
The outlook for ANANDRATHI is supported by strong tailwinds given the fact that India is expected to be the fastest growing economy in the world in FY25
prospects are positive, supported by the rising HNI population who are seeking a strategic approach to wealth creation.
consistent inflows into the equity markets, with new investments hitting record highs month-on-month
11. Do I enter?
If I am looking to enter ANANDRATHI then
ANANDRATHI has delivered a strong H1-25 with PAT growth of 35% & revenue growth of 35% at a PE of 63 which makes the valuations quite rich in the short term.
The guidance of 30% PAT growth in FY25 by ANANDRATHI is already discounted in the price at a PE of 63
At a PE of 63 the margin of safety is limited in ANANDRATHI, one not so strong quarter and the stock may start looking quite expensive.
If the trend of PAT CAGR of 31% for FY19-24 continues then there is value in ANANDRATHI over the longer term even at current PE of 63.
From the ANANDRATHI management’s perspective, the stock is not over valued from a longer term perspective and it has completed a buy back at a premium over the prevailing market price.
The Board of Directors has approved a proposal to buyback up to 3,70,000 Equity Shares at Rs. 4,450 per equity share for an aggregate amount not exceeding Rs. 164.65 crores, representing 0.88% of the total paid up equity share capital
Anand Rathi Wealth successfully completed a buyback of ₹164.65 crore (excluding charges and taxes) in June 2024.
Previous coverage on ANANDRATHI
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