Summary
Anand Rathi Wealth Limited - Q3 FY26 Earnings Call Summary Tuesday, January 13, 2026 4:00 PM
Event Participants
Executives 4 Feroze Azeez (Joint CEO), Jugal Mantri (Group CFO), Rajesh Bhutara (CFO), Vishal Sanghavi (IR Head)
Analysts 11 Amit Prakash, Anand Parekar, Bhavin Pande, Hemant Abhyankar, Jaiprakash, Karan Gupta, Lalit Mohan Deo, Mahek Shah, Naman Shah, Nayan Gaba, Pranay Sethi, Rochan Charan, Shayantan
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total AUM | ₹99,008 crores | +30% YoY; Driven by strong net inflows and mark-to-market gains. |
| Total Revenue | ₹306 crores | +25% YoY; Driven by growth in MF distribution and structured product issuances. |
| Profit After Tax (PAT) | ₹100 crores | +30% YoY; First quarter crossing the ₹100 crore mark. |
| PAT Margin | 32.7% | +110 bps YoY; Improved from 31.6% in Q3 FY25 due to operating leverage. |
| Mutual Fund (MF) Revenue | ₹366 crores (9M) | +21% YoY; Reflects 2.38% market share in net mobilization of active equity MFs. |
| Net Inflows (9M) | ₹10,078 crores | +10% YoY; Equity MF net inflows contributed ₹6,082 crores (+4% YoY). |
| Return on Equity (ROE) | 47.33% | +253 bps YoY; Annualized basis for 9M FY26. |
| Client Families | 13,262 | +1,800 net new families added in the last 12 months. |
| RM Count | 393 | Net addition of 13 RMs in FY26 YTD; 450 account managers in pipeline. |
Geographic & Segment Commentary
- Private Wealth (Flagship): Focused on HNI/UHNI families with a standardized model portfolio; achieved 99.69% AUM retention (0.31% attrition) in 9M FY26. Revenue is primarily distribution-led (1.09% post-GST yield on MFs).
- Digital Wealth (B2B2C): Registered AUM of ₹2,359 crores (+29% YoY) with 6,858 clients; maintains a focus on technology-led scaling for the mass affluent segment.
- OFA (SaaS Platform): Serves 6,850 subscribers with platform assets totalling ₹1.62 lakh crores; acts as a strategic tech-enablement tool for independent financial advisors.
Company-Specific & Strategic Commentary
- Distribution-Only Model: Management reaffirmed its commitment to the distribution model over advisory to avoid “advisory bias” and maintain transparency, noting that 100% of the ₹1,175 crore revenue target is distribution-based.
- Leadership Transition: Following the demise of Product Head Chethan Shenoy, the company opened a Mangalore office and is formalizing “Chethan’s Peace of Mind” insurance scheme for long-tenured employees.
- Operating Leverage: Employee costs as a percentage of revenue fell from 45% to 42% YoY; management intends to reinvest these gains into institutionalizing departments rather than just expanding margins.
- Strategic Sourcing: Diversified structured product issuance by adding third-party providers, contributing ₹213 crores to Q3 issuances (vs. nil YoY).
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue | ₹1,175 crores (FY26) | 76% achieved in 9M; management confident in meeting target but cautious on upping it due to market volatility. |
| Profit After Tax | ₹375 crores (FY26) | 78% achieved in 9M; maintained guidance despite strong performance. |
| Long-term Growth | 20% - 25% (FY27 & beyond) | Management expects to sustain this CAGR by adding 40-50 RMs annually and leveraging a 5-year product rollover cycle. |
Risks & Constraints
| Risk | Context |
|---|---|
| RM Attrition | “Regret attrition” stood at 2 RMs per quarter; while 88% of AUM was retained, a loss of ₹99 crores in assets to competition was noted over the past year. |
| Market Volatility | Asset-based revenue (MFs) and structured product issuances are sensitive to market corrections, making date-specific AUM targets high-stakes. |
| Regulatory Changes | While recent labor code changes had minimal impact on margins (50% basic pay already met), shifting SEBI norms on advisory vs. distribution remain a monitorable. |
Q&A Highlights
Advisory vs. Distribution Model
- Question: Why stick to distribution when competitors use hybrid models? (Pranay Sethi)
- Answer: Advisory models often hide product-level biases (moving money to less tax-efficient PMS/AIFs). True advisory requires zero commissions, and the company prefers the transparency of its current ₹1,175 crore distribution revenue stream (Feroze Azeez).
Structured Product Economics
- Question: What is the extra commission earned on structured products over MFs? (Karan Gupta)
- Answer: The yield on matured structured products is approximately 1.17% p.a. vs 1.09% p.a. for MFs. The company makes only ~8 bps more per annum on structures but recognizes it upfront (Feroze Azeez).
RM Capacity and Growth
- Question: Is the current RM count enough for future growth? (Anand Parekar)
- Answer: Current 393 RMs can sustain growth for 3-4 years. A pipeline of 450 account managers serves as a “hidden” buffer for future promotions to RM roles (Feroze Azeez).
AUM Sourcing Mix
- Question: What is the split between new and existing client growth? (Rochan Charan)
- Answer: Historically 40% comes from new clients and 60% from existing wallet share. The company avoids “forcing” large initial tickets, preferring to earn trust and increase share over time (Feroze Azeez).
Key Takeaway
Anand Rathi Wealth delivered a landmark quarter, crossing ₹100 crores in quarterly PAT (+30% YoY) and reaching nearly ₹1 lakh crore in AUM. The performance was characterized by high retention (99.69% AUM retention) and a 21% growth in 9M revenue to ₹897 crores, underpinned by a 2.38% market share in active equity mutual fund net mobilization. Strategically, the firm remains steadfast in its distribution-only approach, citing its 17th consecutive quarter of >20% PAT growth as validation. While the company has already achieved ~78% of its FY26 PAT guidance, management maintains a conservative outlook (₹375 crore PAT target) to account for potential market volatility. With an ROE of 47.33% and a robust pipeline of internally trained RMs, the firm is positioned to sustain a 20-25% growth trajectory into FY27, provided it successfully manages the transition of its product leadership and potential competitive pressure on RM talent.
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