- Anand Rathi's strong financial performance with 36% YoY revenue growth in Q2 FY '24.
- 35% YoY growth in profit before tax during the same period.
- Private Wealth vertical's AUM grew by 33% YoY to INR 46,571 crores.
- Equity mutual fund net flows increased by 14% YoY.
- The company witnessed net inflows of more than INR 1,600 crores in H1 FY '24.
- Anand Rathi aims for a compounded growth rate of 20% to 25%.
- Potential growth drivers include portfolio returns, penetration of existing clients, new client acquisitions, and RM additions.
- Clients' portfolios achieved a 13.97% compounded return with a low beta.
- The company has a strong track record in penetration and acquisition of high-value clients.
- New client acquisition is becoming easier as the company gains visibility.
- The addition of new RMs is supported by a well-structured training program.
- The management anticipates robust growth in the near and long term.
- They have strategies to mitigate risks, including regulatory changes and taxation.
- Anand Rathi has examined constraints related to supply and hedging needs in structured products.
- The company has a well-defined strategy for addressing potential constraints.
- The team's extensive market experience informs their approach to challenges.
- Anand Rathi emphasizes a client-centric approach and performance delivery.
- They have processes in place to strengthen their relationships with clients.
- Regular simulations and monitoring of constraints ensure preparedness for various scenarios.
- The management is confident in its long-term growth trajectory and strategy.
- Anand Rathi aims to provide HNI-like advice to mass-affluent clients digitally while maintaining ethical advice.
- They are in the evolution stage, focusing on trial and error to make the business scalable.
- The goal is to enable relationship managers to handle more clients using technology.
- They emphasize the importance of handholding clients during market adversities.
- Net margins of around 30% are currently maintained.
- There is potential for net margins to increase due to variable costs and revenue growth.
- Investments are made to ensure future growth, so net margins may not increase significantly in the near term.
- The company aims to protect 40% for PBT and 30% for PAT under most controlled circumstances.
- Anand Rathi views regulatory changes as opportunities to enhance client-centricity.
- They strive to exceed regulatory expectations for client focus.
- Regulatory changes may include commission-related regulations.
- The company avoids taking advantage of regulatory generosities to remain adaptable.
- The regulator's aim is to promote awareness of transparent investment platforms.
- The definition of small cap stocks may not align with market realities due to the growth of stocks' market caps.
- The industry sees room for further growth in small caps as the supply of stocks is expected to increase.
- Distributors can add value by staying ahead of market trends and making investment decisions based on data and analytics.
- Anand Rathi's model portfolio has demonstrated a 3.97% alpha over Nifty in the last 10 years.
- Small caps have potential, but liquidity inflow has driven stock prices.
- Being highly selective in small cap investments is crucial.
- Elections in India historically have not had a negative impact on investors, and it's suggested not to change risk strategies based on election perceptions.