ANANDRATHI - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:14 pm

Fundamental Rating: 4.1

📊 Core Financials:

- Profitability: PAT improved from 92.2 Cr. to 97.2 Cr. (+29.4% QoQ), showing consistent growth.

- Margins: ROCE at 54.0% and ROE at 42.7% highlight exceptional efficiency and profitability.

- Debt: Debt-to-equity at 0.10 → very low leverage, strong financial discipline.

- EPS: 40.7 ₹, robust earnings supporting valuation.

💹 Valuation Indicators:

- P/E: 73.8 vs Industry PE of 54.3 → trading at a premium, reflecting growth expectations.

- P/B: 3,003 ₹ / 100 ₹ ≈ 30.0, steep premium to book value.

- PEG Ratio: 2.24 → indicates overvaluation relative to growth.

- Intrinsic Value: Estimated fair value ~2,600–2,700 ₹, suggesting current price is moderately overvalued.

🏢 Business Model & Competitive Advantage:

Anand Rathi Wealth operates in wealth management and financial advisory services. Competitive advantage lies in strong brand reputation, high ROCE/ROE, and growing client base. Its scalable business model and focus on high-net-worth clients drive profitability, though valuations remain stretched.

📈 Entry Zone & Long-Term Guidance:

- Entry Zone: Attractive accumulation range between 2,600–2,700 ₹.

- Long-Term Holding: Strong fundamentals, exceptional return ratios, and sector tailwinds make it suitable for long-term investors, though premium valuations warrant cautious entry.

Positive

• Exceptional ROCE (54%) and ROE (42.7%) highlight superior efficiency.
• Low debt-to-equity (0.10) ensures financial stability.
• Quarterly PAT growth (+29.4%) shows strong operational performance.
• Institutional support: FII (+0.66%) and DII (+0.33%) holdings increased.

Limitation

• High P/E ratio (73.8) compared to industry average (54.3).
• P/B ratio of 30.0 reflects steep premium valuation.
• PEG ratio of 2.24 indicates overvaluation relative to growth.
• MACD (-4.97) reflects short-term bearish sentiment.

Company Negative News

• Premium valuation compared to peers.
• Technical indicators (MACD negative) show short-term weakness.

Company Positive News

• Quarterly PAT growth indicates strong earnings momentum.
• FII and DII holdings increased, showing institutional confidence.
• Strong brand presence in wealth management sector.

Industry

• Wealth management industry supported by rising financial literacy and growing HNI/retail investor base.
• Industry PE at 54.3 indicates moderate valuation compared to Anand Rathi’s premium.
• Sector growth driven by increasing demand for financial advisory and wealth creation services.

Conclusion

⚖️ Anand Rathi Wealth demonstrates excellent fundamentals with superior ROCE, ROE, and consistent profitability. While valuations are stretched, strong industry positioning and institutional support make it attractive for long-term investors. Accumulation near 2,600–2,700 ₹ is recommended for value-conscious entry, with potential for steady compounding returns in the wealth management sector.