Anand Rathi Wealth Q4 results Preview: Will the momentum after 600% return in 16-months?

Anand Rathi Wealth Ltd (AR Wealth) is scheduled to announce its earnings for the quarter and financial year ended March 31, 2024 on Friday, April 12. The company is likely to report a strong set of numbers on a year-on-year (YoY) basis, while quarter-on-quarter (QoQ) performance may remain on a mixed line.

According to the analysts tracking the stock, AR Wealth may report a strong increase in the revenue, Ebitda and profit-after-tax on yearly comparison, while they may remain flat sequentially. They also add that trends in operations expenses, AUM mix and outlook for FY25 will be key things to watch out.

Equirus Securities expects Anand Rathi Wealth to report a revenue of Rs 182.4 crore for the March 2024 quarter, up 32.2 per cent on a YoY basis, but flat on a sequential term. Ebitda is seen at Rs 79.8 crore, up 29.3 per cent YoY and 3 per cent QoQ, while net profit may come in at Rs 58 crore, up 34.3 per cent YoY and marginally up on a quarterly basis.

"We expect MF AUM growth to be strong due to MTM gains and are building in 6 per cent  QoQ growth. Expect MLD issuance to be broadly similar to the previous quarter. We are building in 34 per cent earnings growth driven by strong revenue growth of 32 per cent.Outlook for FY25 in terms of gross mobilization of structured products, shall be keenly watched," Equirus said.

Shares of Anand Rathi Wealth were listed at the bourses in December 2021, when the company raised a total of Rs 660 crore by selling shares for Rs 550 apiece. The stock had delivered a bumper return of more than 600 per cent from its issue price in 16 months of listing. The stock settled at Rs 3,918 in the previous trading session.

Many players are adopting business models to cater to the wealth management space. Anand Rathi serves mid-market clients as it operates as a pure distributor charging under commission model, said Spark Avendus in its recent report. "We believe that a balanced blend across all these aspects is necessary for success in the Wealth Management industry," it said.

Spark pegs Anand Rathi's Ebitda margin to come at 42.3 per cent in FY24, from 43.5 per cent in the year ago, while it also expects return on equity (RoE) to remain flattish at 41.3 per cent from 41 per cent during the period under review. However, the dividend yield is seen improving from 0.3 per cent in FY23 to 0.5 per cent in FY24.