Anand Rathi Wealth (Q4-25)-FY25 Results: PAT up 33%, Revenue up 30%

Apr 10, 2025

Strong growth guidance for FY26 in an environment of uncertainty and macro weakness.

If I hold the stock then one may continue holding on to ANANDRATHI

FY25 performance against guidance has been strong and is being followed up by a strong guidance for FY26 in an environment of weakness.
One should hold on as long as the management holds on to its promise of 20-25% growth business with a 30% PAT margin. Its not easy to find a 20-25% growth business with a 30% PAT margin at a scale.

Expected to grow our PAT by 20–25% consistently for years to come.

If I am looking to enter ANANDRATHI then

ANANDRATHI has delivered a strong FY25 with PAT growth of 33% & revenue growth of 30% at a PE of 49 which makes the valuations quite rich in the short term.
Guidance of 25% PAT growth and 20% Revenue growth in FY26 by ANANDRATHI is already discounted in the price at a PE of 49
Guidance of ANANDRATHI being a sustainable 20-25% growth business over the longer term at a PE of 49 provides an opportunity over the longer term.
At a PE of 49 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 margin expansion deliver PAT growth exceeding revenue growth continues then there is value in ANANDRATHI over the longer term even at current PE of 49.
- ANANDRATHI is a high-growth, high-expectation stock where valuation will compress only if execution falters.