Anand Rathi Wealth Q2: Adjusted Profit Up 22%, Reported Profit Down to Rs 89 Crore as AUM Tops Rs 1.08 Lakh Crore

Anand Rathi Wealth's results for the September quarter show two very different profit figures. On the adjusted basis the company prefers, consolidated profit after tax rose 22% year on year to Rs 121.9 crore in Q2 FY27. Reported consolidated profit, however, fell to about Rs 89.3 crore from Rs 99.8 crore a year earlier. The wealth manager announced the numbers on Friday evening, along with an interim dividend of Rs 4 per share.

Why the two numbers differ

The difference comes from accounting items that the company strips out of its adjusted figures. These are fair-value gains on investments, the cost of employee stock options (ESOPs) and the related tax effects. Revenue was the same under both measures, up 16% to Rs 356.6 crore. Reported profit before tax was Rs 116.9 crore, while adjusted profit before tax was Rs 163.1 crore, a gap of more than Rs 46 crore. Adjusted earnings per share rose 22% to Rs 7.3.

For investors, the adjusted number shows how the advisory and distribution business is performing. The reported number shows what actually reaches the bottom line once stock-based pay and mark-to-market changes are counted. Both matter, and the size of the gap this quarter makes the company's explanation worth reading in full.

Business momentum held up

The operating data is strong. Assets under management rose 18% to Rs 1,08,377 crore as of September 30. Net inflows reached a quarterly record of Rs 4,186 crore, up 39%. Equity mutual fund net inflows, also a record, rose 39% to Rs 2,867 crore. Revenue from mutual fund distribution grew 18% to Rs 145 crore.

The client base and sales team are growing at a steadier pace. Active client families rose 12% to 14,309 in the first half, and the number of relationship managers rose by 45 over the year to 431. The company reported low attrition: client-related AUM loss of 0.26% and relationship-manager attrition of 0.48% for the half. Its Digital Wealth arm grew AUM 14% to Rs 2,531 crore, and the Omni Financial Advisor platform, which recently began operating in London, has about 6,900 subscribers.

On track against guidance

For the first half of FY27, adjusted profit rose 23% to Rs 237.8 crore and revenue grew 17% to Rs 693 crore. The company said that equals 52% of its full-year profit guidance of Rs 460 crore and 49% of its revenue target of Rs 1,415 crore, so it is roughly on track. Management repeated its long-term growth expectation of 20-25%.

The stock ended Friday's session at Rs 2,038.70 on the NSE, down 4.68%. Monday's trade will be the first market reaction to the results.

What to watch

The main questions are whether record inflows continue if equity markets stay volatile, and how much the gap between reported and adjusted profit narrows in coming quarters. With domestic market sentiment fragile after the RBI's rate hike this month, steady flows into equity mutual funds are a key measure of how willing wealthy Indian households are to stay invested.

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