Anand Rathi Wealth (NSE:ANANDRATHI) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the quarter one of financial year twenty twenty seven earnings call hosted by Anand Rathi Wealth Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch tone. I now hand the conference over to mister Firoz Aziz, joint CEO of Anand Rathi Wealth Limited. Thank you, and over to you, Mr. Aziz. Thank you so much, Michelle, ma'am. Good afternoon, and thank you, everyone, for joining the earnings conference call for quarter ended 06/30/2026. We have today with us the Group CFO, Mr. Jugal Mantri the CFO of ARWL, Mr. Rajesh Saragrutra and our Head Investor Relationships, Mr.

0:56 Vishal Sanghi. As we've always shared with you, we remain committed to delivering consistent profit growth. I'm pleased to report that we have delivered another quarter of consistent performance, which is our nineteenth quarterly result. I would like to sincerely thank our clients, employees and all our stakeholders for their continued trust and support. Despite the volatility, which you all are aware of, in the quarter one FY twenty twenty seven, our uncomplicated business model and unwavering focus on client outcomes helped us deliver consistent market agnostic growth. This once again demonstrates the strength and resilience and the scalability of our business. The mean Y o Y growth of our last seventeen quarters, skipping the first two because there was a COVID base, profit has been growing has grown at a mean median of 31.7% Y o Y and a mean of sorry, mean was 31.7 median was 33.1%.

1:57 Seldom do listed companies measure the consistency of the earnings and the standard deviation of these 17 numbers, which are Y o Y pad growth declared for the last seventeen quarters, the standard deviation was 4.8%, reflecting the consistency of our performance mathematically rather than in English. Total AUM grew by 21% Y o Y to INR 106,300 crores as on 06/30/2026, supported by the net flows of INR 2,743 crores for the quarter despite high volatility. Equity capital markets our client's continued confidence in our business model. So this quarter, we had INR 1,900 crores of net sales in equity mutual funds alone. In our flagship business, in the last twelve months, we have added 1,600 plus new client families on a net basis, bringing our total number to close to 14,000 to be precise 13,941.

2:53 Client attrition rate in terms of AUM lost for Q1 FY 'twenty seven was 0.09%. We love to see this number second decimal, but yes, we would love to see it zero in fact, underscoring the strength of our client centric uncomplicated approach. Zero regret RM attrition for the quarter is another highlight. Now I'll hand over the conference to our Group CFO, Mr. Jugal Mantri, to give you all the updates of the subsidy companies and the consolidated financial performance of the company. Jugal, can I hand this over to you? Thanks, Virulbhai. Thanks, Michel. Good afternoon, everyone. Let me first talk about our other businesses in subsidiaries. Digital Wealth business, which is B2B2C business, registered AUM growth of 23 year on year to rupees 2,526 crores, and number of clients increased by 16% to 7,320.

3:54 Ofa business, which is SaaS platform, has 6,890 subscribers with platform assets of rupees 1.66 lakh crores for the quarter ended 06/30/2026. We have also started operations in UK, and very soon, you all will see this business growing from there and start contributing. Now let me give you all brief about q one FY twenty seven consolidated financial performance. Excluding fair value gains on investments, ease of expenses, and related tax effects Our consolidated total revenue for the Q1 FY 'twenty seven stood at INR $3.36 crores compared to INR $2.84 crores for Q1 FY 'twenty six, registering at 18% Y o Y growth.

4:55 Profit after tax stood at rupees 116 crores, showing a 24% Y o Y growth compared to rupees 94 crores in q one FY twenty six. Profit after tax margin is higher at 34.4% for Q1 FY 'twenty seven compared to 33% in Q1 FY 'twenty six. During the first quarter of FY 'twenty seven, we have achieved 24% of full year revenue guidance of INR $14.15 crores and 25% of its full year paid guidance of INR $4.60 crores. Given the strong business we have built and the opportunities ahead, we remain confident of achieving our guidance.

5:44 Reported numbers, including fair value gains on investments, ease of expenses and the related combined tax effects, total revenue for Q1 FY 'twenty seven stood at INR $4.30 crores and back at INR 163 crores. That's all on the financial numbers. Now we can start question and answer session. Over to you, miss Michelle. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and 1 on the touch tone phone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue attends.

6:32 You may please press star and one to ask questions. The first question is from the line of Shubi Gupta from TRENETRA Asset Managers. Please go ahead. Good afternoon, sir. So my first question is that we are expecting platinum families to grow from 211 to about four fifty to 500 over two years.

7:20 So I wanted to ask what is the quarter one update on that number and how much is the contribution from them? My second question is that clients from less than 5 crore bracket upgrades them to... Themselves to 50 crore bracket. I wanted to understand at what rate does that happen? Every year, how much of the first bucket upgrades to the second bucket? Didn't get your second question, Subhi, if you can repeat that for me. Sir... Yeah, sir. So, basically, clients from less than 5 crores bracket upgrade themselves to 50 crores bracket, which is a target market. So I wanted to understand that at what rate does that happen? Like, as you know, how much of that first bucket gets transferred to the... Or upgrades themselves to the second bucket?

8:09 So I see the first... So first first question is what's the update on the platinum clients? I think platinum clients would be about two thirty now, approximately, from two eleven. And since this is a segment which we have launched just about two point five years back, when we actually launched this segment, we had about 40, 45 clients only. So if you ask me whether we will get to that 400,500 number sooner than later. Of course, question automatically is the next question of the first question or the subset to the first question, how many people upgrade. Five to 50 is a large segment. So we are actually now also trying to segment our clients into gold and platinum. These will be the only two segments we wish currently to have. So I think the upgrade rates would be something like a few a quarter, 10, 15, 20 a quarter, that would be my guess.

9:06 Because we generally believe in not going to people, quite a few wealth management outfits, figure out who's got into money by a transaction, large real estate transactions or large private equity transactions, if people come into money a few INR100 crores, most wealth management outfits reach there and try and get a share out of that. We believe in growing our clients internally. So I think there will be a hockey stick kind of account increase. Like in the last two years, it went up from $45.50 to INR $2.30 crores. So I wouldn't be surprised that you would see it in four digits in a few years. Okay, sir. So just one more question. Sir, AUM per RM has been increasing. I think it was INR $2.30 crores per RM, and now it's been increasing. So is there a cap on that? Or how do we see that progress?

9:57 There's no cap in terms of the amount of money. Of course, there are relationship managers who spent about fifteen, eighteen years with our company. Most of them could be at $508,100,000, thousand 500 crores also. If somebody has created a business for about a couple of decades, this business is about math and time, not about speed. That's what we've been saying. So Rolling Stone grad, there's no math in this business. Anybody who changes companies in this business has if you look at data, anybody who changes more than three companies, the guy leaves the wealth management industry before he retires. So coming back, is there a cap on the AUM? The answer is no. Should that number go up? The answer is yes. When we got listed, if I'm not wrong, that's when we had got to 100 crore per relationship manager. Now we've had more relationship managers, and we have more AUM per annum.

10:48 And since this business, the key crux is what's your client attrition, what's your RM attrition. If your client attrition is point zero nine, it is but obvious that this number will keep going up. So quite a few companies, AUM per annum can come down, then you would automatically it will and it's a cause and effect. So you'll automatically work backwards to check what is the client attrition you will see in a few percentage, 4%, 5%, 710% also in so many Wealth Management outfits. So will this number grow? The answer is yes. If this number, will plateau somewhere? I guess no. Because this is a self fulfilling prophecy because if a client, like for example, I'm manager, in fact, most of our leaders, we have about 86 team leaders and 19 unit heads, all of them are relationship managers, but Rakesh Thor also manages clients, I manage clients. I think, yes, 2,000 crores could be an easy number for Rathi. And we've achieved that in a few cases, depending on how long a person has spent in the company.

11:49 Thank you so much. This was very helpful. Thank you. Thank you. We'll take the next question from the line of, an individual investor. Please go ahead. Yeah. So I had two questions. First is in such a bad market like we had in... From April to June, how do we actually manage our asset allocation during such a high volatile market? Second is why I think you as a house are giving... Having a call that will not invest in gold. But sir, wouldn't it be fair that many of the people have invested in multi asset funds and maybe sold out in the last quarter and entered small cap?

12:42 So this so I wanted to understand this. How is it actively managed? Great. This is, sir, we see, of course, asset allocation. If your overall risk is high in the portfolio, like we measure it in the form of beta, of course, most of people on the call would know well that they are from financial services industry because we have a lot of analysts. Beta is a risk measure, basically trying to risk evaluate the risk relative to a certain index. If my beta is very high, then I need to do active management. Let's assume if our treasury is there, he's he's got some portion of his money with two beta, then he needs to go in and come out of the market. We operate highest beta portfolio is point six, point six five. That means you're taking lower risk than nifty mathematically, not in perception. In mathematics, you're taking lower risk than nifty, so you don't need too much dynamism.

13:35 So that's point one. Point two, you're not buying the riskiest asset in equity. I buy mutual funds currently because that's the most tax efficient platform. And mathematically, if someone were to without being too biased, if he tries to create a diversified portfolio, mutual fund becomes the best platform for a diversified portfolio. So I already have a vehicle, which is the lowest risk. If I was recommending stocks, for example, those are high beta in the equity portion. So low beta overall portfolio and conservative equity allocation and structured products makes my overall portfolio a low beta portfolio, hence active management on asset allocation becomes lower of the need. Then coming to gold, if we have this principle, very important principle, and that's the foundation stone on which our cultural or our professional fabric is at least laid out is we buy we sell what we buy rather than sell what sells.

14:31 So gold already is 28% of India's household savings. Out of the INR 1,600 lakh crores approximately, 28%, which is $4,000,000,000,000 or INR 4 crore crores is already there in gold in the form of 30,000 tonnes. If already we have so much gold, if wealth management also starts selling gold, then an equity mutual fund is 1.8% and I'm supposed to be selling equity mutual fund. If I start selling gold, which is already 28% of Indian household savings, especially after the gold has gone up three times, that's the reason why we don't recommend gold. Because India has enough of it, and it has doubled after twenty years, well, almost fifteen years later, gold has got this rally above 2,000 going to 5,600 and people are still recommending gold in January when the gold had touched 5,500. So that's why we don't recommend gold because India has enough of real estate and gold.

15:28 Right. So out of your total portfolio allocations in mutual fund, are purely into equity as of now? No, not purely into equity. If I remember right, we have about 1,500 in equity, INR 4,500 crores in debt and some structured products and some raw material, which gets aligned to the model portfolio over periods of time. So it's combination of all, but largely mutual funds and structured products. Okay. Right. Thank you. Thank you. The next question is from the line of Rohan M from Equiris Securities. Please go ahead. So INR 110 crores of other income is basically mark to market gains of our holding. Dugas, sir, you want to take that one?

16:38 Yes. It was right. Out of 110 crore rupees, 96 crore rupees, that is mark to market gain in the holding of Anand Rathi Global Finance Limited. And that is the normal other income, which is interest income on the surplus, which we get it. Sure, sir. And just on the... This MBFC revaluation that we have done, like, what is the thought process behind that? Like, how did we reevaluate? No. We don't reevaluate. We we get it revalued from the third party. So investment mentor, he does the revaluation, and this has to be revalued after in every six months. So this is obligatory on us to get the company revalued every six months, and we should incorporate that revaluation in either the increase or decrease in valuation, whatever terms.

17:30 We have to incorporate the same in our P and L account. Sure, sir. Sure. And so what would be the primary and secondary issuances of M and A this quarter? See, the primary issuances at the gross level in q one was about 8% higher compared to last year. So it was to the group companies. So it was 1,875 crore compared to 1,704 crore to the group companies, and the 312 crore of the primary issuances of the third parties. So totally, it was 2,187 crore compared to 1,704 crore in q one of FY twenty five.

18:20 And and secondary, the number was 968 crores in q one FY twenty seven compared to 755 crores in q one FY twenty six. Sure, sir. Thank you. Okay. Thanks. Thank you. The next question is from the line of, an individual investor. Please go ahead. Yeah. Thank you so much. I have a question for. I remember have once told that three of his RN had gone to competitors. So what is the retention of their assets? Like, how do you retain their assets to switch to competitors?

19:07 Mister Vikas. Right? Mister Vikas, thank you so much for your question. Yes. You remember right. So I think in the last... Or the last two... Last earnings call or the December quarter ending, I had said that three of our colleagues went to a specific company, which... So... But, yeah, I have my colleague. So... Yeah. So we basically believe that when a person goes to a newer platform or another company change, if the company is Anand Rathi is a very process driven company, client retention becomes a very important objective. And that has been achieved in the form of, if I'm not wrong, generally 70% to 80% of the assets at least get retained.

19:54 This specific company was wanting to hire people at very obscene salaries because they had raised some capital. So that's why I might have mentioned that three people went there and that data. You have Ulquit? I'll give you the precise numbers. I think it will be in the range of 80% retention. Now when you look at retention, we don't add mark to market. We take the precise net flow of those specific clients who were mapped to that person on the date of resignation. Okay. If you have it, but just hang it. Have one question. Yeah. In the meantime, you can just pull it up. Yeah. How do you plan to derisk your structured product business? Derisk structured product business. So basically, when you look at our recommendation to our client, it's mutual funds and structured products.

20:44 There are 20 different product lines are possible. We believe opportunity is overrated, focus is underrated. This is what Rakesh Thore has taught us, who is our CEO. Don't have to give everything to the clients. So structured product itself is a market risk reduction mechanism for us. In that structured product, we sell Anand Rathi global finance structured products and third party products. The proportion of Anand Rathi is greater and third party is lower because we believe that lending money to somebody else, you have to be very, very careful of a credit risk not fructifying. So Anand Rathi Global Finance is a group company, and that's why our comfort remains there. What you might see as a risk of concentration, for me, it is a derisking in itself because we have already seen two such a product popular issuers in India almost went belly up, and one of them actually went belly up.

21:42 So having of course, when they went belly up, there were a lot of mutual funds, conventional bonds, which were there in the mutual funds portfolios of that specific AAA rated so called company. So coming back, structured product helps you derisk the market and brings down the beta of one's portfolio. That's one. Second, when you're speaking about concentration risk, concentration risk on ARGFL is because we believe that lending to certain corporate, you have to be very, very careful because debt risk can't satisfy. So what you see as risk is my derisk. Thank you so much. I'll answer, Vikasar. And now we will get the numbers. So we one second.

22:31 The day when these three gentlemen designed incidentally, these three were from women. So INR $7.58 crores is what they had. Net flow was INR 73 crores. Correct? INR 2 crores in July. So now we have INR $6.85 crores of the INR $7.58 crores with us currently, INR 58.5 crores. This is as of unit. So one person was could take away a little more, the other could take away a little less. So basically, 90% of it is retained, without the market movement, of course. Does it answer, Vikas, as precisely as you get? Yeah. I... This was a pretty good explanation for sure. Yeah. Thank you. Thank you so much.

23:18 Thank you. The next question is from the line of Anita Singhhania, an individual investor. This is. Yeah. Good afternoon. Would like to ask two questions. Ma'am, sorry to interrupt you. Ma'am, there is a follow-up on the line. Can you me... Mute all the other lines which are connected from the same room? Yeah. Is this right, Yes. Please go ahead. Oh, yeah. So I have two questions. My first question is, as you already applied for mutual fund license, is there any plan to expand in other capital market businesses such as investment banking or others? And my second question is, can you explain your plan and views on the liberalized remittance scheme?

24:05 Okay. So, yes, we have just got a board consent approval to apply for an AMC license. We believe that arming ourselves is very critical because we have some aspirations, long term aspirations for this business. So arming ourselves with all the ability is something which we see as our duty towards our shareholders. So yes, that's our Board consent to go and apply for the AMC license, one. Second, will we get into investment banking? Of course, the Anand Rathi Group already has an investment banking wing. I guess you're asking me this question because quite a few wealth management outfits try to get their assets from investment banking transactions like I just alluded to in the previous answer.

24:56 Sometimes people go after. Those are we believe that that is capital management, not wealth management. By design, wealth management is intergenerational in our belief. So we are trying to get that portion of the assets like INR 106,300 crores has been filtered to see a large portion of that is intergenerational wealth. So investment banking for the world has a very large synergy with wealth management, but we believe that getting intergenerational wealth doesn't come from investment banking transactions. That's why, for example, I must tell you, Mr. Anand, that one of my friend works with a real estate firm and he says that the promoter has got a few INR100 crores or a little over INR1000 crores for next five, six years, he can invest.

25:47 I'd say Anand Rathi Wealth Limited is not interested in five, six year money. So that's why no investment banking. And of course, quite a few people have had a strategy to build it there. There's nothing wrong with it or right with our strategy. But yes, Rathi, we want to not focus on capital management, but in business management. Wealth management business is more longer term and intergenerational wealth is what interests or appease to us. So only AMC, no collateral other businesses like investment bank. LRS, yes. Is prompting me that I skipped the LRS. Again, LRS. Again, let me again say what I just said. Focus is underrated and opportunity is overrated. Everybody tells me there's so much opportunity of the LRS money. Clients also need it.

26:34 Maybe clients need it. But if one eighty two product people are trying to understand India and we are still somewhere we are scratching the surface. If I have to give global recommendation across so many markets, I will at least have to have 200 products people sitting somewhere in Singapore or Dubai. Making tie ups is very easy. A wealth management like ourselves can go another private bank and tie up and refer our clients, but we have been told by our bosses, Mr. Rathi and Rathi's store that only speak in places where you understand second decimal. Otherwise, miss the opportunity, you are better off doing that. You can't be everything to everyone for all portions of their money. So LRS is something which is currently far fetched. Of course, it's a huge opportunity, but we are we are okay to miss it.

27:28 Okay. Thank you so much, Suraj. Thank you. Thank you. The next question is from the line of Lalit Mohanviu from Equira Securities. Please go ahead. So just two questions. Firstly, on the muted file decision. So, like, we have been hearing that a lot a lot of that said that due to the change in the expectations, they have... I think whatever the impact, they have been passing on to the distributors. So do we experiencing any pressure on our e... And the user service. And then secondly, with respect with the the RPA circular on the line guarantee to start to market entity. So there was a...

28:14 Due to this, there is an expectation that the volumes on the... It might go down. So the the rate impact that the rate does Does it it have any kind of an impact on the derivative business, which is done by the MD and ANANDRATHI. Got it. So your voice was muffled. I tried attempting to hear you. Correct me if I'm not understood your question correctly. The first one is, AMCs are believed to transmit all the TR pressures to distributors. Is that your first question, sir? Yes, Yeah. I think some degree of to and fro happens. But since we are now a seriously large distributor, it becomes difficult for them to also transmit all of it. Whatever is rightfully our one, two bps, I think I would have told you last time also, those get passed on.

29:08 But in this in this... Now that you've brought me to the subject, I would like to highlight in FY 1920, was it FY 'nineteen-'twenty, about six, seven years back, we out of the total net sale in India, Anand Rathi Wealth Limited was 0.18%. Now for this quarter, is it, Vishalji? No, for FY 'twenty six. March? 'twenty six, yes. For FY 'twenty six, you'll be happy to note, if you're already a shareholder, that the 0.18% market share on net flow has gone up to 2.47% as highlighted in the presentation. So since we are a large distributor, we also have some bargaining power is the point I'm making. And we might be the only wealth management, one of the few wealth management outfits, which participate our long positions of our clients only using a mutual We don't recommend stocks. We don't recommend PMS. We don't recommend long only AIF currently. If my clients need it someday I might. So my other wealth management distributions will generally be having mutual fund as one of the products.

30:09 So it gives me that little extra, but one, two, three bps of transmission might happen here or there, like I told last time also. And Trump decides to yield better more because mark to market comes because of that. Sometimes it is so two, three bps is very little on a base of 1.09, if I remember right, post GST, which is what I earn. Does it answer, sir, the first question? Yes, sir. Yes. And with my bad memory, I've forgotten the second one. If you could just prompt me again. Yes, sir. It's it's on the the circular of the banking entities, which are. So the RPI circular, I I see that as a great circular because in India, because of GST and other things, quite a few times, there is market inefficiency coming in. So a learned high frequency trader or a derivative trader can...

31:06 In fact, in India, you can see some... On naked eye, you can see arbitrage. Arbitrage is supposed to be identified by second decimal computer. Sometimes when I see the terminal, I can see some arbitrage. So I'm very glad that some degree of volume of all these high frequency traders will definitely get curtailed, and that makes transfer of wealth becomes a little more difficult. For example, let me give you this example. Sorry. On a earnings call, I'm giving you this example. Nifty can be rolled over in a spread window. The underlying constituents, there is no spread window for rolling it over. This is like a huge arbitrage. I'm I'm sure just because someone that or someone in terms of what technical I'm speaking about. If somebody wants to roll over their short or long position on Nifty, there is a spread window. But stocks, which are the underlying 50 stocks of Nifty don't have a spread window.

31:55 So higher the restriction on high frequency traders or learned people who actually operate their computers, supercomputers on Black Scholes pricing model, it had become really easy. So RVI Circular brings down this frothy volumes, which were the largest cause of wealth transfer between Indian retail and somebody who's second decimal understands order second order Greeks of derivatives. So I'm very happy about that. Second, what will be the impact on us? Negotiable or nil? No, in fact, positive impact. Because if you see the last Tuesday, so many Tuesdays, you see these one minute candles with 100 movement, that is largely because of high frequency traders. So market volatility will become a little more smoother on Tuesdays and Thursdays is my assumption.

32:41 So it's better, and I'm very happy for the country and its regulation. Thank you. The next question is from the line of Akhil from SKVM Company. Please go ahead. Good afternoon. Yes. Good afternoon. Am I audible? Yes. Yes. Yes. Yes. Congrats... My name is. What I think is that I don't know. I'm an... I'm your in sorry, I'm your customer also client since last ten years, and I'm a practicing child accountant and independent director in few of the companies.

33:26 And first of all, congratulations to you all, sir, on such wonderful results. Would like to know only one small thing. At this pace, when you are reaching to a mutual fund industry long term aspiration. Sachin, sir,. Sorry. Sachin, very Sachin. Sachin. Sachin. Sachin. Think I don't know. It was in a hurry or. Much. Sachin, sir, thank you for your question, and thank you to be our client for ten years. I'm extremely grateful because interesting hard earned money is one of the best things you could do for us. I'm also shareholder in your company.

34:12 Client plus shareholder book. Thank you, sir. Of course, shareholder market. And now coming to your question, sir. Long term target mutual fund industry. We were looking at about a 4% market share on the overall category two. Growth and equity oriented scheme is called category two. Market share percent project whatever was knocking on our doors, we did

37:16 our best as a professional duty. We want to make sure that we look at all 05% risk, 1% risk and mitigate those as professionals. You so much, sir. You, sir. Sir, thank you for answering those questions. The participant has left the queue. We'll move on to the next question from the line of Priyank S from Treenetra Asset Managers. Please go ahead. Hi, sir. Thank you for the opportunity. While our legacy business has been growing steadfastly and in a calibrated manner, I just wanted to understand, you know, is there any sort of AUM figure that you all are aspiring to be in the next five, six years, you know, which will be divided between our structured and and the mutual fund business?

38:08 A. B, I also wanted to ask, you know, that this has now become the norm that all last case distributors are going towards setting up their own mutual fund business, and we understand, you know, that this is ideally you get more control and the yields also, you know, see an uptick. So is that with our line of thinking? And third is The UK business, there's a huge NRI market there. Will yields be higher compared to India? And how do you see that? Yes. So that's a lot of questions, Priyank, sir. First is, yes, quite a few distributors might have done something like backward integration, like you see the first slide in my presentation of the company.

38:56 Those are our learnings, which we have learned the hard way. So we have published it for anybody who gets lured with the wealth management business. Like I had said, wealth management is optically very, very easy business from outside on Excel sheet, and it is as difficult as it could get internally. That's my judgment, having spent a couple of decades in this industry. So in that, you would see point number three, wealth management is a business of backward integration, not forward integration or simultaneous integration. So that's why now that we have eighteen, twenty years of full fledged distribution, having a backward integration made sense for us. That's why we are doing it, not because somebody else is doing there, some wealth management outfits, which raise capital and start all businesses at once. All the best.

39:42 But we think that it has to be backward integrated. That's where it comes from. So it's not from the herd mentality or a trend which might be there. We really have some reasons, but we don't want that to be completely disclosed today. We have stronger reasons. We have a clear thought process. We have a lot of testing done in terms of doing that. But like you would have seen, we have never attached any value to our subsidiaries of digital wealth, whereas in 2021, people could have sold anything on the basis of technology. So similarly, we would want to underplay it currently, but it is not stemming from wealth digit, it is stemming from our own individual thought process. And it is consistent with what is written in point number three of the first slide. And then, sir, ask me what's the first question for you. Sorry, I mean, I'm answering one, I forget the next one.

40:37 So just wanted to understand any sort of specific AUM figure that you're aspiring to be four years from now or five years from now that would give us some sort of visibility? Yes. So we have done projections for long periods of time. But how you should look at if you want to model once, I think about four, five quarters back, somebody had asked me how we look at it internally and actually shared the model also on my website. No, you're not. So basically, how we look at it is whatever assets we currently manage, 1 lakh 6,000, markets can't be subdued forever. Last two years, Nifty went on a negative slipped into a two year negative return on ninth June of this year. Nifty can't be negative internally, okay? If you look at the past of just before I come to my specific AUM, I'm just giving you some color, which I've done a study. It was interesting for anybody who has some money in the Indian capital market. Anytime Nifty delivered two years negative return over the last twenty six years, there are 50 observations out of two ninety one with monthly shifts, which gave a negative return for two years. The subsequent three years, all those 50 observations were positive and the worst return was 4.1, best return was 56.8, mean return was 21.6 and median return was 20.2%.

41:45 So having said which, if history has any merit, the probability that Nifty will deliver more than its historical median return of 11% is very high for the subsequent three years. With our selection methodology, we have a lot of signs for whatever it's worth. We have beaten nifty by 4% compounded after what we've got. So coming back, so if you project our AUMs on the basis of 10% to 12% M2M with some degree of conservatism, and if you add INR 1,100 crores, 1,200 of net sales, which we intend to do per month for the next three years, and then you can grow the net sales also at the rate of 10%, 12%, you will be able to arrive at the exact AUM, which we target. So basically, a 20%, 25% AUM growth, 1012% coming from mark to market and 1012% coming from 1% per month of net sales coming from. If my AUM is 106,000 crores, internally we discussed that we need to have ballpark single INR $10.60 crores will be my implied net target for that month. That's how we look at it. 8% single So I will be at 20%, 25% AUM growth, 26% AUM becomes 10x in ten years. Just for ease of mathematics and the same.

43:08 Does it answer, sir? Perfect. And just a short answer on the U. K. Business. Is that exciting? Are the years better than the new business? How do you look at it? Generally, yeah, it it is exciting, but I've realized that we we... When we look at mathematics of a certain business, we'd like to be excited after some numbers tickle because... Yeah. I... We are happy that we now have a UK subsidiary. We'll be trying to scale it up very soon. We hire a lot of people. That's not our style. We like to build it brick by brick. So if somebody is not a shareholder for ten years, five years, seven years, we should not even worry about the subsidy. As as honest as I could be. Sure, sir. Thank you. Thank you.

43:56 Thank you. The next question is from the line of Rupali Patel from Elementus. Please go ahead. Hello? Yeah. Sorry. So this is great part to hear my phone and issues, so I'm just calling from your. So we are basically in the AIWL family now, and thank you for allowing us to be a part of your family. So once again,, sir, and AIWS team, congratulations on the stupendous success. In fact, it's the... What... As you are saying, that is thirty one percent year over year over the last seventeen quarters, accepting that COVID part. And at the same time, maintaining this particular... Increasing this AUM to 1 lakh 6,000 crores. So with this, actually, what's... This is translating to something like 25, 30%, 202025% annual growth or whatever.

44:52 If you consider all these other, you know, allow for certain certain relaxations here and there. So with this increased AUM, how do you see that in the coming years, in the coming three, four years, if you are able to maintain this particular growth, the AUM and the growth as well as this increase. Of course, most of it is coming out of the increase in the performance. But as of... And then it will come as increasing the AUM to new acquisitions, etcetera. But with this, how do you see this growth being maintained and kept intact over the next three to four years?

45:40 Three to four years, I think the growth has to be reasonable high probability retention because what happens is, like we said, we're very passionate about how we manage as against how much we manage. If you look at the mark to market gain, which is easy for one to calculate backwardly, backward calculation after we have listed our clients have made INR 28,000 crores, 30,000 crores of profit itself. If you look at net sale, my AUM minus net sale will be my mark to market. My clients have made in a bad time. Of course, any client who has joined us in the last two years has not made the expected return because Nifty has delivered 3%, 2% depending on which particular period did he come in in 2024. So what I'm trying to get to is this business inherently is an easy business if you don't have client attrition.

46:28 If you do justice to one's money, the clients are going nowhere. That's one. So if and if you should be very passionate about clients, expectations should be lower than what you can deliver. So coming back, can you grow this business for three, four, five years at 20%, 25%? In our judgment, yes. That's that's the order I have for my boss, mister Rathi. And I will as a professional group, I am speaking on behalf of all the 400 odd relationship managers and account managers that we do our best. Now coming to where does this come from? There are four mutually exclusive cylinders to fire. One is implied growth or an embedded growth of returns of clients. Okay, when I look at my clients portfolios who are long term ish clients, 15%, 16% has happened, even on the model portfolio level, even at delivery. That's the embedded growth in our business. Then new clients existing relationship managers. Today, the number of relationship clients per RM is 33.

47:26 That means we already have plant and machinery to acquire to have 17 more clients into 400 odd, which is close to 6,500 new client families can be handled by the same colleague set of us. That's called new client acquisition of existing capacity being utilized, capacity utilization. Third cylinder is new relationship managers. We have four ninety people trained. It's easiest said. But thinking about it eight years back, hiring a youngster, giving him patience, teaching him, and then promoting him is one of the toughest tasks one could accomplish in in reality. So that is already people. The next 100 set of are being prepared are all are 60% right. Right?

48:17 Then there'll be more plant and machinery for acquiring more clients. Then the last one is existing clients. This INR 1 lakh 6,000 crores comes from 13,941 families. And we don't tell our clients to start big. If anyone has dealt with us, we don't tell them Most private bankers will tell you that put a guard on your head and say start with INR 4 crores, start with INR 5 crores. Till sometime back, we were also ready to start with 50 lakhs for a person who has 10 crores. Because if I don't do list service, he will give me the money if I deserve it. That was the secure place which Rathi sir has suggested us to be. So this one lakh 6,000 crores of 13,000 families, which we are in the process of measuring it accurately, you will at least have twice more of that outside.

49:05 So that is called penetration. So capacity utilization, penetration, new RMs and embedded growth. These four put together 20% to 25% last quarter wasn't easy from a sentiment standpoint. But we do have it. So odds if you ask me to put an odds, I would do 90%, 95%. Some odds have to be given to god's action. Great. Thank you. Thank you, sir. Thank you. Good luck. Thank you so much to be a part of our family. I don't know as a client or a shareholder, but, yeah, we are a family. Thank you, sir. Thank you, sir. We'll take the next question from the line of Sunil Shah from SRE PNS. Please go ahead. Yeah. Thanks.

49:50 Thanks, everybody. Thanks, Firoz, for this opportunity one more time. Firoz, just just one of you sound off some of the talk. We kept there. I I hope I'm audible. Yes, Firoz, sir. Yeah. Hi. Firoz, just now that we have a successful track record of, like, more than decades plus, how about taking this entire structured product thing to the global markets? We have some kind of a, you know, formula based trading that we do with the structured products on our Nifty, etcetera. Why not try this for various global indices? Now clearly, there has to be some other party thing. Like, here, we have our sister concern who is giving us the other party side of the transaction as well.

50:41 What about targeting those global banks on this, the Citibank, the HSBC, the JP Morgan and over time, maybe not in like one quarter, two quarter, but directionally try to replicate our entire model in the global market so that then the world of growth opens up for us. Just just a thought, and then, you know, we can do it through the wealth platform that we have. We can have the AI thing if you want to take some higher fees. And now we are also getting the board approved for the mutual fund. So even in the mutual fund industry, as a differentiated product over a period of time where even if in the AMC business, are an 800, but the differentiation can really be a huge winner with time. So just wanted to sound this, Firoz, and wanted to hear your thoughts on what I'm talking, if at all, you know, you can you can just discuss this out with me, please.

51:40 Sure, Sunil. Sir, your suggestions have always been thought provoking. One person has consistently given us guidance on this earnings call, if not all the 19, you might have guided us in 10 of those, And I'm very grateful. So as soon as I hear your Shukna, I might become a little more attentive. I'm very grateful for that. Now coming to my reaction on as a company, can we look at structured products on other indices or in other denominations on nifty as Nectics definitely can be explored, especially when you have an NRI platform now in the form of a U. K. Subsidiary. And we have a product, which is in U. K. For tax efficiency for U. K. Participants in India. We have made a fund of fund there, 11 schemes, which are listed there, which is very tax efficient. So those clients need Wealth Management structure products. Globally, structure products is very, very popular.

52:37 I am told that in Singapore, 50% of one's HNI portfolio is structured products because you are able to create a risk return profile using a Black Scholes pricing model precisely to the need of it. So coming back, should we explore that? Yes, sir, we will definitely explore that. As Mr. Kalpesh Kuradia, who is the Head of Designing of Structure Products And I think that's that's point. Pricing. So global volatility today is 6%. S and P 500 volatility for last calendar year is 6% greater than Nifty in spite of having 10x more the number of stocks. People don't probably put the closing prices of Nifty and S and P on the same Excel sheet. If you look at the standard deviation thrown up by Nifty, it's 6% lesser than that of S and P. If I'm not wrong, it was thirteen and nineteen. So what I'm trying to say is with that kind of volatility on S and P 500, it's like a lottery for a person who is long gamma to hedge that. And the interest rates earlier in the global market were very low. So the products you design that would be more call buying than put selling because the power rates have also gone up there. So you're absolutely right. Volatility has gone up and interest rates are a good raw material for a good structure product pricing.

54:02 Has Kalpesh done a full fledged job? The answer is no. A couple of times, has shown me some pricing because he had a Dubai office. But yes, I will make sure that Kalpesh does some designing and deliberates internally and also shows you if you have any interest on that and then you might be able to give us some specific recosions or guidance. Yes. Sure, Suraj. So that's the whole idea that we have done this for a long period of time as a company. We have grown. We have built a team. The third element of sustainable growth is that innovation part. If we are able to do that, I think we still have a long, long way to go on the growth front. So just wanted to share and good to hear you, and I'll take this with Kalpesh offline as well to understand the things that are going Thanks thanks everybody in the Anand Rathi family for for this call and having me on the session. Thank you. Thank you, sir. Thank you.

55:03 The next question is from the line of Arun Gopal, an individual investor. Congratulations on the entire team who could make up a return of 23.5% year on year basis on this quarter, where it is everybody was struggling to just even meet just being neutral there, level on growth. So congratulation to your team. That's where Anand Rathi stands about making growth uncomplicated. That's absolutely what you all stand for. I'm an investor and a shareholder of it, Anand Rathi Wealth, an investor for the last eight years. I really appreciate your hard work and your vision and the mission of your organization, which has really written a lot of good wealth to all your stakeholders and shareholders. Thank you.

55:56 Thank you, Arun, sir. And if I recognize you from your voice, Arun is a common name, sir. Arun, sir, from Bangalore. Right? Chennai. Chennai. Okay. Great. So I was in Abu Dhabi and then moved on to Chennai for my mother.. Yes. Yes, sir. Thank you to be our shareholder and client for so long. One thing I should note that you gave us a positive such a positive comment almost at the fag end of the call. I must say that clients have been very, very patient during bad times, and they have also looked at supporting us by giving us fresh monies. We believe that when you get money at lows, which is very difficult, the sales cycles are larger, it takes difficult it's very difficult emotionally for fiddles to cut a check when the market is down and out. So Rathi has designed our minds to be long term thinking is why I'm able to take courage, and I've been able to, as a company, transmit courage, but clients have given us more money, one.

56:53 And second, thanks to the mutual fund selection process, out of the nine twenty four schemes, choosing those 14 mathematically using all the science possible over the last twelve, thirteen years of evolution, we have our mutual fund head whom I have worked for eighteen years, Shweta Rajani. Sorry, I'm always the person who's the front of it. So there are some heroes and some heroines who are there at the banks. I'm not missing the opportunity to recognize Shweta Rajani who has been doing mutual funds in my Macquarie and really get a quote that I know her. From two thousand and eight, nine, she's only one of the biggest names in the mutual fund industry. She has chosen those schemes, and you'd be happy to know from April 1 to April 30... April 1 to June 30, our model portfolio has beaten nifty by about 6%, if I'm not wrong. All the 14 teams have beaten nifty. It seldom happens, so I'm highlighting. Always there'll be two, three laggards, which will become better in the next quarter and so on and so forth. But thanks to clients and Shweta, our client outcomes have been very beautiful last quarter. Nifty has done about 7%.

57:55 Well, end to end, 7% Nifty gave, mutual fund portfolio 14 scheme has given 7% after our cost more. So thanks to Shweta and clients. Thank you, Arun, sir, for such a positive comment. Made my weekend. Thank you. Thank you. Take care. Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I now hand the conference back to Mr. For closing comments. Thank you, and over to you, sir. So I'm very, grateful for everyone's time. I know it's a Friday, And you have consistently supported us as a client, as a shareholder, as a person at the capital market. We, as always, I would want to reassure that we stand by our indications, and we will do our professional best to serve our clients first and then our shareholders.

58:57 I look forward to the continued support which each of you have given us in the past four point five years than before. Thank you, sir. Thank you, members of the management. Thank you so much, Thank you, Thank you, members of the management. Ladies and gentlemen, on behalf of Anand Rathi Wealth Limited, that concludes this conference. We thank you for joining us, and you may now disconnect. You.