Anand Rathi Wealth shares surge 16% intraday as company reports 3-fold jump in Q4 profit; brokerages see up to 30% upside

Shares of Anand Rathi Wealth touched an all-time high to Rs 711.95 per share on the BSE on Wednesday, gaining over 16 per cent on the intraday basis. The three-fold jump in its profit for the March-end quarter of fiscal 2021-22 was the trigger behind the upward move. 

The company on Tuesday reported profit after tax at Rs 35 crore in Q4FY22, as compared to Rs 10 crore in the same quarter the preceding fiscal, Anand Rathi Wealth said in filing to exchanges. 

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While the company’s revenue rose by 49 per cent to Rs 115 crore in Q4FY22 from Rs 77 crore in the year-ago period. "Our growth in AUM to Rs 32,906 crore, 23 percent over last year, has helped us deliver strong growth in topline and much higher margins, the company’s CEO Rakesh Rawal said. 

At around 12:10 pm today, the stock was trading with gains over 11 per cent at Rs 680.5 per share. The stock was listed on December 14, 2021, at a 9 per cent premium of over Rs 600 apiece levels and gained over 17 per cent since its debut. 

Anand Rathi Wealth is one of India’s leading non-bank entities, offering wealth solutions, financial product distribution, and technology solutions via three business verticals: Private Wealth (PW), Digital Wealth (DW) and Omni Financial Advisors (OFA). 

According to brokerage Equirus Research, the company enjoys an industry-leading RoE (Return on Equity) profile with FY20/FY21/9MFY22 RoE of 37%/20%/41% driven by strong revenue growth in the distribution of market-linked debentures and a rising commissions share from MF distribution. 

Equirus initiated coverage on the stock with LONG and sets a target price of Rs 810 per share (over 30 per cent upside) at 20x FY24E EPS for FY23E/FY24E RoEs of around 40/38 per cent.