Shares of Anand Rathi Wealth, which is a part of Mumbai-based financial services group Anand Rathi Financial Services, surged a little over 17 percent in Thursday's intra-day trade to hit an all-time high of Rs 1,092.65 apiece after the company posted a strong performance for the June quarter of financial year 2023-24 (Q1FY24).

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In an interview with CNBC-TV18 on Thursday, Rakesh Rawal, CEO, Anand Rathi Wealth, said the company has a conservative approach to giving guidance. "In the first quarter of last year, we had done about 26-27 percent. So, the policy that we have is that we should do very well in the first quarter," the CEO said.

This is because, according to Rawal, the pressure of meeting numbers is not sort of kept for the last quarter. "That builds in a certain degree of happiness index, right through the year, otherwise most companies who leave it to the end, face pressures and stresses," he explained.

Further, he said that the company is creating small profits, but no cash burn is there. So no capital infusion is required at the moment, he said. "I am saying that today I am creating a profit in those companies so therefore, in the beginning, for example, when we started these businesses, the revenues were far lower than costs and there it was burning cash."

The Anand Rathi Wealth CEO further said the company has a formula driven bonus system for employees and therefore, it is directionally variable. "If my top line is up 34 percent as compared to last year, then several of the costs will also be up. Of course, not to say that there is no scope for operating leverage, but it is limited," he noted.

Just because the market is at an all-time high, the strategy won’t change, Rawal said. "We have seen, all-time highs in the past, and we with time will get to new all-time highs, right and therefore, as long as there is corporate growth happening in the company's new highs will be created in time."

Therefore, according to Rawal, if clients retain their asset allocation, they will get 12-13 percent. This is how client portfolios have behaved over the last 10-15 years, so no change in strategy for clients, he said.

Also, Rawal pointed out that the leading non-bank wealth solutions company will cross 10,000 active client families this year. Additionally, the company continued to expand its client base adding 395 client families in the first quarter of the current financial year.

On market-linked debentures, Rawal said that MLD issuances were in the range of 1,100-1,200 on a gross basis in the first quarter.

Anand Rathi Wealth 's revenue growth came in at 21.3 percent to Rs 178 crore, driven by healthy growth of 11.3 percent quarter-on-quarter (QoQ) in assets under management (AUM). On year-on-year (YoY) basis, revenue and AUM grew 33.6 percent and 32 percent, respectively.

Shares of Anand Rathi Wealth were listed at the bourses in December 2021, when the company sold its shares at Rs 550 apiece to raise Rs 660 crore via its initial stake sale. The stock has rallied 98 percent from its issue price till now, while the stock has gained about 75 percent from its 52-week lows at Rs 627 about a year ago.

(Edited by : C H Unnikrishnan)

First Published:Jul 13, 2023 1:54 PM IST