Multibagger Stock: Anand Rathi Wealth soared over 340% in just 9 months, advanced 650% in little over 2 years

Shares of Anand Rathi Wealth, one of the leading non-bank wealth solutions firms in India, have jumped 4.5% to hit an all-time high of ₹4,189.85 apiece in today's intraday trade as investors reacted positively to the company's Q4FY24 earnings. 

Looking back, the shares have delivered phenomenal returns to their shareholders in a very short period of time, as they hit record highs with each passing month. 

The company's shares, which were trading at ₹933 apiece in July 2023, have skyrocketed to the current level of ₹4,127 apiece, delivering a whopping return of 342% in just 9 months. 

Impressively, the stock has shown remarkable performance, ending in the green for eight of the past nine months. November 2023 recorded the highest monthly gain at 36%, closely followed by February with a rally of 20%.

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Anand Rathi Wealth is engaged in the business of private wealth, catering to high- and ultra-high-net-worth individuals (HNIs and UHNIs). The company's shares were listed on the exchanges on December 14, 2021, for ₹583.15 apiece, 6.1% higher than the issue price of ₹550. Considering the current trading price, the stock is trading 650.36% higher than its IPO price.

Despite the challenges posed by geopolitical tensions, the resilience of the Indian equity capital markets has been noteworthy, contributing significantly to wealth generation and the robust growth of the wealth management sector. Amid this backdrop, the AUM of wealth management companies has grown sharply in recent years.

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Strong show

The company on April 12 reported a 33% surge in its Q4FY24 consolidated net profit at ₹57 crore on strong revenue growth. The company reported a net profit of ₹42.7 crore in the year-ago quarter. 

Its total revenue from operations came in at ₹197 crore, representing an increase of 34% compared to ₹147.1 crore posted in Q4FY23.  Its trail revenue during the quarter jumped to ₹80 crore, an improvement of 65% YoY. 

Its assets under management (AUM) at the end of the March quarter stood at ₹59,351 crore, an increase of 52% compared to ₹38,993 crore in the same period last year. 

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“As of 31st March 2024, 60% of our clients have been associated for over 3 years, representing 79% of total PW AUM, which shows ARWL’s strength in vintage of both clients and their AUM,” the company said in its Q4FY24 earnings report.

For the FY24, the company posted a 34% YoY growth in its consolidated net profit at ₹225.8 crore, while the revenues improved by 35% YoY, reaching ₹752 crore. 

Furthermore, the company's board has given the green light to a final dividend of ₹9 per equity share with a face value of ₹5 each. 

Additionally, they have approved a proposal for a buy-back of up to 3,70,000 equity shares at ₹4,450 per equity share, amounting to a total not exceeding ₹164.65 crore. This represents approximately 0.88% of the total paid-up equity share capital.

Momentum is set to continue

Looking ahead, the wealth management sector is poised for robust growth, buoyed by projections indicating a substantial increase in high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs).

As per the Wealth Report 2024 by global consultancy Knight Frank, the number of ultra-high-net-worth individuals (with a net worth exceeding US$ 30 million) is forecast to rise from 13,263 in 2023 to 19,908 by 2028.

In 2023, India saw a 6.1% annual uptick in the UHNI population compared to the previous year, reaching 13,263 individuals. Furthermore, significant expansion is anticipated in the counts of high-net-worth individuals (HNWIs) and very-high-net-worth individuals (VHNWIs) over the next five years.

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Conversely, individuals with incomes exceeding Rs. 1 crore witnessed a 15% increase from FY18 to FY23. Maintaining this growth trajectory, their numbers are projected to reach 3.40 lakhs over the next five years, contributing to the expansion of the Indian wealth solutions sector.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.