Anand Rathi Wealth Profit Dives 45% Despite Record Inflows
The wealth manager's revenue grew 16%, but reported profit collapsed due to a high base of one-off gains and ESOP costs.
Anand Rathi Wealth posted a 15.7% rise in Q2 FY27 revenue to ₹344 crore, yet net profit fell 45% sequentially. The drop stems from a high base of one-off gains in the prior quarter and ongoing ESOP expenses.
Anand Rathi Wealth's latest quarter shows the business engine humming even as the profit statement stutters. Revenue grew 16% from a year ago, powered by record client inflows, but reported profit fell sharply. The gap between a strong underlying business and a weaker headline number is the story.
Revenue for the September quarter rose to ₹343.99 crore, up 15.7% from a year earlier and 6.8% from the June quarter. Profit, however, fell 10.7% year-on-year to ₹89.26 crore and plunged 45.2% from the previous quarter. The net profit margin compressed by 770 basis points to 25.9%.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 (Sep 2026) | PreviousQ1 FY27 (Jun 2026) |
|---|---|---|
| Revenue (₹ Cr) | 343.99 | 321.99 |
| Profit (₹ Cr) | 89.26 | 163.01 |
| Net Profit Margin (%) | 25.9 | 50.6 |
Why the profit fell off a cliff
The severe sequential profit drop is largely a base effect. According to reports from CNBC TV18 and insights.dsij.in, the previous quarter (Q1 FY27) benefited from higher other income, including mark-to-market gains. This quarter's reported numbers also include ESOP expenses and related tax effects.
The company highlights an adjusted 'business PAT' figure, which excludes these fair-value and ESOP items. On that basis, CNBC TV18 notes profit actually rose 22% year-on-year to ₹121.9 crore. The reported margin squeeze, therefore, reflects accounting noise more than a deterioration in core operations.
The engine that kept running
Beneath the profit volatility, the wealth management machine delivered. Assets under management crossed ₹1.08 lakh crore, up 18% year-on-year despite an 8% decline in the Nifty, as reported by CNBC TV18.
Live Chart
· ANANDRATHI
(BSE)
ISIN: INE463V01026
The real strength was in flows. Quarterly net inflows hit a record ₹4,186 crore, surging 39% from last year. Equity mutual fund inflows also set a new high at ₹2,867 crore. This translated into an 18% jump in mutual fund distribution revenue to ₹145 crore.
The outlook and the valuation gap
Management, cited by insights.dsij.in, reiterated its long-term growth outlook of 20-25%. For this fiscal year, it targets revenue of ₹1,415 crore and adjusted profit of ₹460 crore. The first half has already achieved about half of these goals.
The stock's reaction was negative, with the price falling over 4% post-results. At a P/E of 63.7, the company trades at a significant premium to the industry average of 17.6. Investors are weighing the premium against the company's high-quality, asset-light model and consistent market share gains.
Key Points
- Reported profit fell sharply due to a high base of one-off gains in Q1 and ongoing ESOP costs, while the underlying 'business PAT' grew 22% year-on-year.
- Core business momentum remained strong, with record quarterly net inflows of ₹4,186 crore and AUM growing 18% to over ₹1.08 lakh crore.
- The company is on track to meet its full-year guidance, having achieved roughly half its revenue and profit targets in the first six months.
- The stock trades at a high valuation premium, reflecting its asset-light model and growth, but remains sensitive to quarterly profit volatility.
Hexa Perspective
The quarter underscores the dual narrative at Anand Rathi Wealth. The operating business is gaining share and gathering assets impressively, almost indifferent to weak equity markets. This is the credibility marathon management often describes.
Yet, the reported earnings will remain choppy, influenced by market-driven gains on its own investments and ESOP accounting. For the premium valuation to hold, the company must continue converting its swelling AUM into predictable, high-margin recurring revenue. The planned foray into asset management, by manufacturing its own products, could be a critical step in that direction.
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