Q2 25/26

Oct 14, 2025

Ladies and Gentlemen, good day and welcome to Anand Rathi Wealth Ltd. Q2 and H1 FY2025-26 earnings call. 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 phone. I now hand the conference over to Mr. Feroze Azeez, Joint CEO of Anand Rathi Wealth Ltd. Thank you, and over to you Mr. Feroze. Thank you so much Sopnali. Good afternoon everyone. Thank you everyone for joining the earnings conference call for the quarter and half year ended 30th September 2025. Today on the call we have with us Group CFO Mr. Jugal Mantri, Product and Research Head Mr. Chethan Shenoy, our CFO Mr. Rajesh Bhutara, and Head of Investor Relations Mr. Vishal Sanghavi. I'm very pleased to share that we have delivered the 16th quarter of consistent and market agnostic performance despite the challenging environment with Nifty declining about 3.4% during both the quarter and the full year. I want to take a moment to highlight the remarkable journey. When we launched our IPO around four years ago our AUM was about INR 30,200 crore and in just about four years we had added more than double that amount reaching to a total AUM of INR 91,901.568 crore at the end of September 2025. During the quarter FY26 equity mutual fund net flows increased by 101% year on year to INR 2,062 crore as compared to 2025 last year same quarter when the sentiment was significantly better last year than this year. This makes us believe that buying when the sentiment is bad creates a lot of value for our clients and that numerically seems to be established in this quarter. In H1FY26 our market share in equity mutual funds net flows stood at 2.33% in the category three of Amfi's publishing numbers. Quite a few people were skeptical about penetration and market share when it comes to because of Direct as a competitor during our IPO and subsequently over four year period. If you see our market share has gone up from 0.16% in FY20 to 2.33% of the net flows in India have come in active funds to us. During the quarter 2 FY26 total net flows increased by 28% to INR 3,002 crore as compared to INR 2,336 crore, so the overall net flow was also reasonably healthy. Hence H1FY26 total net flow rose by 20% to INR 6,826 crore compared to INR 5,700 crore last year period of half year. In our flagship private wealth business during the last 12 months we have added about 1,800 plus families on a net basis bringing our total number of clients to 12,781 and client attrition numbers have been. Client attrition numbers in terms of AUM lost remain low at a second decimal of 0.09% for the quarter one FY26 and 0.18% for FY26 the full half year, reaffirming the trust our clients place in our uncomplicated client centric approach. Digital Wealth business, which is a B2B2C business, registered an AUM growth of 21% YoY and reached INR 2,211 crore, and the number of clients increased by 20% to 6,570. The OFA business, which is our SaaS platform, has 6,790 subscribers with platform assets of about INR 1.59 lakh crore as of September 30, 2025. Now I request Jugalji to give business highlights for the quarter which went by. After him, I will give highlights of the financial performance. Jugalji, all to you. Applause. Thank you so much, Feroze Bhai. Good afternoon, friends. Let me take you all through Q2FY26 consolidated financial performance. First, our consolidated total revenue for Q2FY26 stood at INR 307 crore compared to INR 250 crore in Q2FY25, registering a healthy 23% YoY growth. Our profit after tax stood at INR 99.89 crore, registering a 31% YoY growth compared to INR 76 crore in Q2FY25. Profit after tax margin for Q2FY26 was at 32.5%, which has improved from 30.6% for Q2FY25. Now I will take you all through H1 of FY26 financial results. During the first half of financial year 2026, our consolidated total revenue grew by 19% YoY to INR 591 crore from INR 495 crore for H1FY25. Profit after tax increased by 29% YoY to INR 194 crore from INR 150 crore for H1FY25. Profit after tax margin was 32.8% for H1FY26, improved from 30.2% for H1FY25. In the first half of FY26, the company has already crossed the 50% mark and achieved 50.3% of its full year revenue guidance of INR 1,175 crore and 52% of PAT guidance of INR 375 crore. We have reported strong return on equity, or ROE, of 45.5% on an annualized basis for H1 financial year 2026. Continuing our policy of rewarding shareholders, the Board of Directors have declared 120% interim dividend, translating to INR 6 per equity share. Now I request hereby Swapnali to open the floor for question and answer. Over to you, Swapnali. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Akash Shah from AJ Wealth. Please go ahead. Hi sir. Am I audible? Yes sir. Hello. Yes Akash sir, we can hear you. Just one question from my side sir. Actually our RM attrition has increased but we have still managed to retain most of the AUM part. Typically what I have seen in this industry is when RM moves out they tend to take a larger portion of their client AUM. I want to understand what we are doing differently or what client retention controls do we have in place that help us minimize the risk of AUM loss. Akash, see firstly RM attrition in our company is reasonably low. Like I had told you last time around on the call, I don't know whether you were there. We had some cultural issues with a few people in the location so we had to let go of two and other two left themselves. These four additional features that you see in this H1 are largely from one location. That's point one and point two. When an RM leaves basically what happens is there is a certain motivation of the RM to leave but the client centricity. If I exhibit that the client is better off here because we try and deliver a risk return of 4% to 6% in the. There are very few companies in the country who have a Jensen's alpha published on the overall AUM. For example, if you want to calculate the Jensen's alpha of Anand Rathi Wealth Ltd., we are now listed. This is our 16th quarter. You can get to know the mark to market gain which I've had every quarter. You can calculate that Nifty mark to market and find out the risk which is beta in the public domain. You can find out what is the total profit we have made in public domain mark to market for the last 3, 3.5 years. If you look at Jensen's alpha. What I am trying to get to is if I told a client if the RM is leaving and if you want to move with him, what is the Jensen's alpha of the other company which he is joining and that Jensen's alpha is not there so it becomes easier to retain a client. Of course RM has the strongest relationships and it should always be like that. It should not be technology led. We've been able to retain about 79% of the four people so far of the assets they had. That's why you see an attrition number, client attrition number in 0.18 or 0.17. Okay sir, understood. Just one last question sir. I mean guidance of INR 1 lakh crore. Is it still intact or are we trying? I mean can we increase the guidance? We will not increase the guidance because AUMs are on a specific date. If 31st March of FY26 is not so good, then the AUM could be this way or that way. We retain the guidance of INR 1 lakh crore. It's an aspirational number. We are at INR 91,568 crore. We'll keep that as INR 1 lakh crore. We always like to under commit, over deliver in that same theme or the belief, would like to retain it like that. Especially an AUM number, you would not want to update because it's very difficult for any of us to predict what 31 March of 2026 will be like and what assumptions are baked into market performance, which is organic inflows. It was INR 1 lakh crore. It was an aspirational number. We started last year, we were at INR 75,000 crore. We are at INR 956 crore. We assume 10% market growth generally. The net flows have been very good and that's why it's been good. We assume 9 to 10% market growth generally. Thank you. Thank you for all the rest. Thank you sir. Thank you. The next question is from the line of Pawan Pandey from MT Investment Managers Ltd. Please go ahead. Hi, good afternoon team. I hope I'm audible. Yes sir. Yeah. Congratulations on set of numbers and consistency. What do you think? You know once our AUM sort of crosses INR 1 lakh crore, INR 2 lakh crore the visa site would come in. When we look at growth. How do we look at those, you know once a visa comes in. Secondly, perspective on flows from the existing families and utilized additions. Have you seen the mix change where you know new families are contributing more. Third, what's the overall outlook on the market? Given the way we have seen a lot of consumption routes coming about. Great. What was your first question? Sorry, I missed the first one coming in. Right now we are almost at INR 1 lakh crore. Maybe two years down the line we'll be at INR 2 lakh crore. How do we look at the growth numbers? That 25% growth that we're kind of looking at but it is coming about very quickly with 28%, 30% growth on a YoY basis for the second number of growth it would it be slightly lower. We still maintain the 25% kind of a growth number. Thank you for the question. Now I got the question first with the base effect. You're absolutely right. We've been waiting for a critical mass for whatever right or wrong. We have assessed that the critical mass in mutual fund AUM for example is INR 50,000 crore of regular AUM. Out of which INR 46,000, INR 47,000 crore was mutual funds for us. Critical mass at a total level like you said, close to INR 90,000. INR 1 lakh crore is one. In individual there are very few wealth management outfits which have been able to reach INR 50,000 crore of AUM in their distribution assets. We always thought that was critical mass. Once you get to critical mass you are collecting a certain kind of client. See what is different about Anand Rathi is we don't take everybody who has short term, long term mindset, greedy mindset. We filter our clients very very clearly that we'll be able to 13% to 15% with a beta of points with Nifty. If you are very aspirational, you please go the full circle. You realize that it is 14%, 15% compounded over 10, 15 years. Very good. Point is absolutely right. This business is all about critical mass. Because HNIs love to go with larger outfits. That's why quite a few wealth management outfits inflate their AUM so that they can create a very good pull from a client standpoint. People count my assets in there. By taking an advisory agreement of INR 4 lakh, they're counting INR 200 crore. Point is yes, critical mass is important. This business is all about mass and dime. Will we increase the rate of growth? I don't think so, because with the base being larger, the quantum of rupee value is higher. Percentages may not increase because 1 lakh % growth. Will we be able to sustain that growth? The answer is a big yes. Will it be easier to sustain that growth? The answer is a big yes. After reaching critical mass, will you be able to attract more like-minded clients? The answer is yes. Will we up our guidance of growth numbers? No. We are only working day and night to increase the chance of growth rather than the growth itself. If I have given or my boss Mr. Rawal, who is also my professional guru, has given a guidance that these purchase % growth. We are only looking at how do we enhance the chance that this statement becomes more and more credible with 30, 50, 100 results, which they've 16 so far. No upping the %, upping the probability. That's what it will do. Second, new families and fresh clients both have seen some reasonable numbers. 65 is existing currently and 35 is new. Why is it 65, 35? It could also be 50, 50. We are very relaxed when we attract the clients. We don't tell him. We say if we do our bit then there's no reason why you would not give me a large portion. Only thing we filter is whether he's got a $1 million plus to give us, if he so chose to. We let him start with INR 1 crore. The ratio is 65, 35 because we don't put a gun on the head to start big. We think that if we deserve, we will get it. HNI is a smart contract community is the hypothesis. That's the split, 2/3 and 1/3, and I think getting references. People are now taking pride. That's the critical mark. Our clients are taking pride to say that we deal with them and they're referring their friends and their confidence has come up on us. That's why first time we have attached 200 client acquisitions in a single month in September. Okay, that was very helpful. Your outlook on the market given the way we are seeing consumption boost and government initiatives on the frames. Yes. Sorry, I dodged that question. We personally think that when it comes to market we try and answer simpler questions. Whether in the next three years will Nifty give more than median return? Median return of Nifty is 11.12% three-year median return. Mean return is 13.5% to 14%. We expect in the next three years Nifty will deliver 90% chance of a greater than median return on Nifty. One second question we ask ourselves is what are the odds that there could be a catastrophic fall? The probability of a catastrophic fall is near zero. We believe that everybody is light on the market. Margin funding books are light. FII short positions are 92%. FII's net flow over the last four and a half years after Covid is zero. DIIs are sitting on inflows. INR 29,513 crore has come into September SIP. Mutual fund. Of course, a lot of mutual fund analysts should be on this call. The point I'm trying to make is DII is loaded with money. FII has already sold. FII in future market is negative. Margin funding books of top five brokers are not at the peak. Catastrophic falls are unlikely even if U.S. tried their best for our markets to fall. That's why resilience is there. Lowest negligible probability of a catastrophic fall. What I mean by a catastrophic fall is more than 15% fall and the median return probability is upwards of 90%. With that kind of an assumption, can I deliver 13% to 15% for my clients with 0.6 beta? That's my proposition on the objective of numerator delivery. Thank you. The next question is from the line of Arun Gopal, an individual investor. Please go ahead. Good afternoon. I hope I am audible. Yes, I really appreciate Anand Rathi's statistical approach to the market, which is so uncertain. That statistical approach gives a lot of confidence as an investor and as well as a client of them. I've got three questions. Basically, one is I wanted to know the revenue stream and the product mix between the revenue stream between mutual funds and structured products. The second question is now a lot of emphasis is being based on structured products, which are market competitive. Which sounds logical because plan B is now the right time to be activated because the market is powering around. I wanted your view on that. The third one is where do you and the team see Anand Rathi in the next five years? Thank you, Arun sir, for your question. NFNSP revenue stream, we had guided that we will get to 50:50 over a period of time. We are working extensively for a revenue stream to be balanced. SB 50 and the other 50, have we gotten there? There may not be. We might be at, how much, Vishal, 43, 44, somewhere in the 43-44 kind of range we are. We are trying to get to 50:50. That's what long term it will be, is the prayer and our effort, and to do that, what gives credibility to the statement, you would see a 2.33% market share in net flow for the first half year. We have lakhs and lakhs of IFAs in India. We have MBS, national distributors, banks, all of them have brought in a net flow of 97.5, for example, and Anand Rathi, 382 RM, 386 now, have brought in 2.33% of net flow in active equity mutual fund. That's how it gets. That tells you whether we will get to 50:50 or at least are we attempting to do 50, and an earnest attempt is being made. That's point one. Second, market, should I put money in the market or SP, we generally don't tilt ourselves either way. Like my portfolio is 65% equity mutual fund, 35% structured products. Wherever there's a gap, if I got a bonus, if the RTG fell 10 and gave me a bonus, I would, or whatever is the gap in my proportions of the strategic allocation. If we do that mechanically, without getting biased on the recent performance, quite a few of our clients sometimes get carried away. When the markets do very well, they are averse to such a product. When the markets are bad, they are averse to equity mutual funds, but we try and guide them mathematically. That's why you see INR 2,065 crore has come in equity in the last quarter. It makes me feel happy that the market, Nikki, here compiled. We try and not gravitate towards either. Do we plan B? Do we very strongly recommend? The answer is yes. People say why do you recommend? Quite a few competitors say structured products, vested interest, okay. If you look at 1,059 structured products which have matured from December 2020, they have given maximum possible return they could have given. We use all Monte Carlo simulator, all our understanding of derivatives to design a product which is not the most attractive to see but more than probabilities they estimate. For the last five years, almost all products which have matured, which is 1,059, which is almost one every working day, the same kind of products. Of course, all of them have given the maximum possible return because there's a lot of technical expertise which the product team brings. That's the market and S&P Nifty mutual fund and split. What do we see, Arwi, in five years from now? From Anand Rathi shareholder standpoint, we plan for September 2030 revenue like yesterday, September 2030 revenue. How much of that is done for me? If I have to grow my business in next five years at 20%, I need INR 236 crores revenue in September 30, 2030. If I grow my business revenue at 25%, I need INR 289 crores. How does that break up between trail and structured products which will mature five years from now? You would see that there's an implied 18-19% growth which we plan for five years from now. That's from a shareholder standpoint. Revenue of September 2030, Oostgaard, because charter products mature at double the money and there is a rollover option. That's on the revenue side. Now comes to from a client side, we have a target of making INR 125,000 crores of mark to market gain for our clients. If I have INR 91,000 crores, if I grow money at 14-15%, I can get a mark to market gain for my clients of INR 90,000 crores on the current average. If I collect INR 1,300 crores, 400 crores every month, then and I end up collecting almost INR 90,000 crores again over the next five years, that also can give me a mark to market at 14-15% or INR 40,000 crores. Our aspiration for the client is that answer. Yeah, that does answer my first and the third question very clearly. I just wanted you to throw some more light on structured products because a lot of the new clients who are coming in onboarding onto the structured products, they look with a lot of skepticism into the product. It's probably they don't understand the way it works or they find it as a hidden agenda. Sometimes if it can be explored a little more, structured product plan B on the investment horizon, that would be a little helpful for the other people who are sitting on the fence and then trying to see which way they go. Yeah, Gopal, a structured product is nothing but a bond. A bond which does not fix your return. It gives you a variable return depending on the underlying, which in this case is Nifty. Right. What risk do you carry? Nifty market risk is most explicit in this product. If Nifty delivered this, this is what you will get. Five years later you have to turn on TV and see, for example, what is Nifty. What is the liability of the product towards you? The second risk is how is the money kept. The promise is one thing, promiser is the next. If the promiser is alive is when he will fulfill the promise. How is the money which Anand Rathi Global Finance gets live. You will see 63% of that money is in investments in demat accounts. I'm sure my colleagues will take you through if you have had that discussion. Of course, competitors have always been predicting our default for the last 13 years. How the money has been deployed, you will realize that an NBFC is managed very, very carefully and without any greed on NIM, can have very, very good credit risk management. That's what we are proud of. If you look at the scores of the NBFCs which we filter, there are about 9,500 NBFCs. We do bottom up, try and have these three filters on all the NBFCs. We have currently been able to approve only two of them. One is Anand Rathi Global Finance and another external. Thank you very much. Sorry. My Investor Relations Head prompted me that we did a three-part series for everyone to understand threadbare and that can always get it from Vishalji. That's very exhaustive. We are planning to do more series if you people want to understand. Definitely, definitely. I'd love to get the series. Thank you very much. Thank you very much. If you can get the mail ID of you. Yes, it will be put on our website. Okay. Thank you very much. I'll pick it up from the website. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Jyotish V from Capita. Please go ahead. Hi. Congratulations, Master Baut. I think my question was earlier asked. I think for the years the biggest strength or one of the biggest strengths has always been the attrition rate. If my observation has been right, it is going down. How do you plan about working on this and working towards it? Jyoti. Mr. Jyoti. Right. If you look at attrition, of course there will be some attrition here or there. When we look at our revenue, like I told you how we plan the revenue of 2030 September because all our structured products have a rollover right now. It means that the revenue, if I have done X amount of structured product sale in September 2025, give or take September 2030, the same thing will mature with a certain 14, 15% return. Which means, let's assume 15% for the moment for argument's sake. If I collect INR 100 crore this year, September five years later there's INR 200 crore to mature, right? It is very, it's lesser effort for a person to roll that over for the next five years and not exercise the production. My revenue streams at a company level are reasonably stable because we have a trail revenue. For an RM also, it is like we were doing the math for one of the RMs whom we internally called Singham. His trail revenue is INR 19 lakh. INR 19 lakh in the next five years. If his AUM doubles, then he has INR 38 lakh of revenue in September 2030. His structured product sale for last month was INR 4 crore. That matures as INR 8 crore. He has INR 8 crore more to mature then. His total revenue for September 2030, 80% is done sitting today. Will an RM, either the company has to increase an RM or somebody who's got private equity money wants to throw four times the salary and then later pressurize him, he can leave. Most sensible people will automatically look at getting a trail income and putting their business on autopilot. These attrition numbers which you see are not going to last. There are some differences we have on the cultural side. I don't want to spell out the specific reason of letting go of two people and their friends, two more people letting go. On the call I had highlighted last time as well. You can expect some attrition where there are cultural misfits but not an exodus is my belief so far. Thank you so much. Once again, congrats to the entire team on this. Thank you. The next question is from the line of Priyam from Premitra Asset Managers. Please go ahead. Hi. Thank you for the opportunity. My question is that if you look at our yield to assets, they are much, much better than everyone in the street. Frankly, that is because of our key strength of structured products. My question is that as AUM increases to 5 years down the line or 7 years down the line to say INR 3 lakh crore or INR 4 lakh crore, obviously I'm expecting that structured products would be INR 1 lakh crore to INR 1.5 lakh crore at that time. My question, sir, is that in this product we are essentially not taking a market risk, we're taking some credit risk. As this category grows, is there enough good credit available? A and B, do you think that the yield on structured products will remain the same or will it come down as we see growing? Thank you. I missed your name. I'm so sorry. Priyam Shah. Priyam. Priyam Sahib Fund is. When you call yield, yield is always per annum, right? If I look at yield, both mutual fund gives me 1.09% for the thousand products which matured in structured products. If I calculate as per market value in the same method how mutual fund gets calculated, my yield is somewhere between 1.15% and 1.17%. Yield-wise, both are identical. Recognition-wise, they could be different. Second, if structured product becomes INR 1 lakh crore, INR 1.5 lakh crore, is there enough good credit? Anand Rathi, I think global finance, our confidence there is 99.99% because of the kind of management and their liquidity of the balance sheet. Do I have so many NBFCs who are ready to manage it in a liquid way the way Anand Rathi Global Finance manages? The answer is no. There are so many NBFCs who want to take money in structured product, but I don't feel like lending them. I'll give you structured product return. Why? 14% of Anand Rathi. I'll give you 17%, 18% with the same product specs. Is this business scalable to INR 1 lakh crore, INR 1.5 lakh crore? You can believe it or not. My judgment, yes, very, very easily. Now, why so is a separate story. Most of the things which somebody will just see as an output would not have credibility, but that's how it is. INR 1 lakh crore, INR 1.5 lakh crore, INR 2 lakh crore, INR 2.5 lakh crore, this industry can grow very easily. That's my judgment. Sure. Just a follow-up question. Are we focused on all of our areas going ahead? Do you think that we'll be more focused on the equity part, or will it just be as it is right now, or any new products on the angle it will only. Our focus is single-minded obsession. I will call it client's objectives. That's my obsession as a company. Everyone who's there says that. Let's assume if the client wants to deliver 14% return with 0.7 beta, which is the simplest way to achieve it. If equity mutual funds can't do it, I'll replace them with PMSS. If PMSS can't do it, I'll replace it with AI. The focus is client's objectives. That's about it. If you are able to deliver for the client, if our hypothesis is client is smart, he will give me a lot more penetration capability into his wallet and his fly in seconds. We keep checking on whether I'm missing out or not missing out. What I can do is everything what wealth management companies, other companies do, I can do because nobody stops me doing any. I can, other wealth management outputs survive on only two product lines. Difficult, the convex is not true. I can do whatever which helps my odds of achieving a certain objective. That's the focus. Sure. Thank you. Thank you. Might seem very idealistic, but yeah, that's the objective. Thank you. The next question is from the line of Sunil Shah from SRE PMS. Please go ahead. Yeah. Hi. Hello fellows. Everybody in the team. Big big hi. Thanks once more for this stupendous performance. Really need to congratulate each one. Thank you so much. My thoughts around this. I think we have worked out how we scale up employees in the organization. We have got a process in the organization that is really commendable. Similar applies to even clients as well in terms of equation etc. One point I want to make to you is in terms of our structured products. Now the three part series, Vishal and his team, they nicely explained everything. The AUM that we have in structured products, as I see from the presentation, is 27% of our area will be structured products, roughly about INR 24,700 crore. Let's round it up to INR 25,000 crore. We are really diversified, whether in terms of dependency on one employee or one client, we are totally insulated from any vagaries on that front. In terms of the structured products, our concentration risk is high in terms of Anand Rathi Global Financials, just highlighting, so if we can look at diversifying. I made some three different options where the diversification can happen, and in due course of time all the senior management, including Chethan and all, can take a call, but just wanted to share the names in terms of NBFCs where all these guys, Bajaj Finance, Tata Capital, Motor Finance, HDB, they're all established. That's one category of NBFCs which can be approached, explain this thing, and eventually this relationship can be developed so that we diversify from Anand Rathi Financials Global Finance. The second set is the global bankers like Citi and HSBC or JP Morgan etc. The third is the broking community which are now listed, so the likes of Edelweiss, IIFL, Kotak, and Nuvama. I believe in the past we have had such a structured product with Nuvama and Edelweiss. Just wanted to share how we can minimize this so-called risk in maybe my mind, investor's mind, or the longevity point of view. That was the thought which I wanted to share with you. Would like to hear from you please. Thank you. Sunil sir, your suggestions are always very valuable. I think the three part series was also your suggestion. If I remember right, I'm very very grateful to you. Absolutely. Your concern is well noted. Is diversification on the cards? The answer is a PTS as we approach approved. One more just now again, Nuvama, like you mentioned. Since you mentioned, I'm mentioning, they are again there on the platform. Coming to which direction of diversification which you suggested, the problem with one. Are you there? Okay, okay. He's hearing. Anyway, Kanpesh who did the three part series will tell you how we look at evaluating from the 9,000. Our first criteria is at least half the money should be invested rather than lent, because you need to have extensive margin always at all points in time. If the margin is INR 10, INR 20, you will have INR 50 out of your total money collected. That's one. Now, of course, these big names which you said, they are very, very good names. If they start issuing structured products, I would be the first one to actually approve them. The problem is structured product. Any company which can borrow at 8%, 7% without doing too much would not want to do all this manner to borrow at the same rate, right? That's my only challenge, right. I'll do a mutual fund placement straight. Why will I take INR 5,500 crores per new or INR 300 crores every month for the next 20 months? That's one challenge. If you suggest I do another one part series or a two part series which says how do you evaluate, what are the 34 filters which we use, how do we use that score to evaluate? Actually, we had approved two of them. Both of them went through trouble much before we exited, right. That's because of Saltesh Khuradia who heads this division, has been heading division for 13 years, Mark. His assessment of credit risk helped us get out of two other issuers well before the revenue started. I'm not going to name them, but one of them was called AAA unfortunately. Okay, right. We will do this one part series and we are looking at diversification. Point noted. Sir, you will hear some more news from us. Sure, sure. Thanks so much for all the efforts and please continue scaling higher. Thank you so much. Thank you. The next question is from the line of Mahak from MK Global. Please go ahead. Yeah, hi. Thank you for the opportunity. Most of my questions have been answered. Just two questions. If I look at the net inflows, the equity mutual fund inflows as a portion of the overall inflows constitutes around 70% roughly for Q1 Q2 FY26 as compared to 53% for the earlier quarter, i.e., Q1 FY26. Could you give any particular reason for that? Secondly, if I look at your finance expenses that have increased sequentially by around 21%, what could be the reason for that? These are my two questions. Firstly, what number you said? Great, you've noticed that. I'm glad that you did. That just proves or at least adds credibility to Sunil Sir's statement saying that you're process driven when it comes to clients. You're process driven in terms of people growth. Now that's the data which you have said. When the markets are down, let's assume one of my clients has INR 100 with me. If he gets INR 20 more, if I have to divide this 65:35, INR 13 needs to go into mutual funds and INR 7 needs to go into structured products. When the market is down, the gap in mutual fund becomes larger because the other portion, 1,535, and the market is down, his 65 has become 60, structure has not fallen. Where does the gap move? The gap is in mutual funds. Right. When you allocate money as per a process rather than a top of mind recall, it's easier to sell a structured product last quarter because mutual fund large money has good performance media. If you go as per the gap sheet of where the gap has emerged when the markets are down, you will buy more mutual funds. Last year, same quarter, markets were up. If you remember, on 26th of September 2024, Nifty was at 26,270, which was the peak. Peak it established in the last quarter, same year. That time, I only had a larger, only 52% going into mutual fund because the mark to market was higher. Was I able to articulate what I'm trying to say? Yeah, I got it. Got it last quarter. Yes sir. Go ahead. I was telling, secondly, on that finance expense, rejecting the finance, Mr. Mahak, what happens is that as and when the lease rentals get renewed, like this year, there were a larger number of lease rentals that got renewed. As per Ind AS 116, part of the lease rental has to be booked under finance charges. That is why whatever finance charges which have been booked, around INR 2.5 crore in the first half, is on account of the renewal of the lease rentals. I think we have taken some car loans of about INR 10 crore last year, INR 20 crore. There is an increase of the cost on that car loan also on account of that. That is the reason finance charges have gone up. Thank you. The next question is from the line of Srilank Mehta from Indo Ad. Please go ahead. Hi, can you hear me? Yes sir. Hi Feroze. Congratulations once again for fantastic results. My question was a little more on the longevity front. The way the company has performed in the last few years. Do you see this performance without any new platforms to be created to continue in the next two to three years as well? Primarily focusing on, you know, how you're delivering on deep PAT growth and also very high ROE. Do you see this in the same manner going forward? Yes. One is of course God, only the time will unfold. Our attempt is to keep the ROE high. You also see that you have given a INR 6 dividend on an increased number of shares. Second, from a predictability standpoint, we believe that the four engines, we believe of course so many externally may not be able to believe there are four cylinders to this growth. One is if I deliver very good performance to the client, risk adjusted of course not just return, then my revenues go up automatically. That's called the implied growth. There is an implied client. Client attrition has to be second decimal or at least one decimal. If not second decimal, then you have the implied growth. You have your existing RMs who can manage 6,000 clients extra more than what we have today. No new plant investment, we have more number of clients. RMs also do well. They get more clients and they've been more satisfied than the other family clients there. That's the second thing. Capacity utilization. Third is penetration. Most of our clients since we don't push them. These three cylinders plus the new RMs we already know who are our next 100 RMs. Our RM attrition has been high. We're trying to address that. Since we don't do lateral hires, my cost of a new RM building his life is immense patience and very low cost. You see that lateral hires are not even 8-10% of our total last hundred RMs. That means all these four legs of growth, new RMs, existing RMs, new clients, existing clients or monies which are outside and the term line growth put together in our firm belief is for long periods of time, 20 to 25. With the base going up, would I say that the last 16 quarters our median growth is 33. Mean is also 33. This quarter is 31. Can these 30s normalize too in the 20-25 range as the values become bigger or this. The answer is yes. For new drivers like international markets or any other diversification that is really required to sustain this kind of growth. I think our RMs, we didn't go give them targets, right? They dream well, they green well. They don't have a geographical restriction. Today an RM is actually acquiring a client in Abu Dhabi who has been referred sitting here in India. The answer is yes. Coming back to what all do we need to do to sustain this, there are several things. Does it mean that I have to start other businesses for that? May or may not be. Are we doing more on the GIFT City side? We took an approach from the board that would be there in a minute. Are we doing domestically for NRI investing in structured products? Are we doing something? The answer is yes. We are trying to solve the issue with us NRIs. The answer is yes. Have we applied for Bahrain license, Representative? Yes. UK license? Yes. Do I see these as ideas to protect growth? No, I see them as the right things to do. What we see as protection of growth is to reinvest in some four, five things. We are reinvesting in technology. You will see that we are doing a beta test of an app called Uncomplicated by ARWL, trying to make technology our strength. Investing in HR, investing in operations, these things we will do. Will we sustain the margin of 46% PBT? That's not the intent. We reinvest back to ensure that the probability of the 20-25% keeps increasing with each passing day. That's the strategy. Do we need more things? Yes. Are we worried about the 20-25%? No. Do we have to strengthen seven, seven verticals? Rakesh, was it of course trend then? Right. Rather than just try and say let's do new stuff, does it answer, sir, that thank you for right or wrong. That's what we discussed in our office. Yeah, absolutely. Thank you. The next question is from the line of Thresh Jain from Motilal Oswal. Please go ahead. Yeah. Hi sir, congrats on a good set of numbers. Based on this, the distribution of financial products part, which is largely structured products, is there a seasonality? Generally, we look at Q3 and Q4. Run rate in terms of revenues is lower than Q2 and Q1, but we've seen it in FY2024 as well as FY2025. Now, is there a seasonality the way it kind of works in this segment? You're saying Q1 and Q2 is higher, Q3 and Q4 is lower? Yes, and that we've seen in FY2024 as well as FY2025. There's no seasonality. What happens is there could be. For example, an RN is given the freedom to plan his business. Okay, so it could be different energy levels in the first half and the second half marginally. Second is quite a few analysts who are worrying and making me worried, saying the seasonality, if there was any, was when we moved after Covid in August 2020. We learned that we did one mistake, that if you make a three-year product and then at the end if he doesn't get the return, he was provisioning a great return. Then he got back capital. I can say, sir, you got that capital during the peak of Covid. Isn't that good enough? You could have bought Nifty at 7%, but that still doesn't suffice. We moved from three-year to five-year in August 2020, which implied that my maturities from August 2023 to August 2025 were dried up because we had moved to five years. That was one of the seasonalities. That was because we took the right call of moving from three to five years and that was actually very good. Otherwise, I would have had some maturity where there wouldn't be so much gain for the client as of now. That's the only seasonality I can think of. Unfortunately, unlike most people's prediction that my mutual fund market share will go down because I don't do satkas in the Tao and my such a product will also be very difficult to do. That August 2025 shiny period is over. Right? Right. Generally, you've been kind of delivering stellar returns on even this portfolio, structured portfolio, the structured products portfolio. Why is it that you kind of want to grow this business at a slower, relatively slower pace versus mutual funds? Not a relatively slower pace, sir. If I look at 65:35, which is the allocation you will come to, so that we have, we're not growing it as now. I think one of the 27% now is in structured products. When I allocate money, if the client has chosen 25% in structured products, 10% in debt, and 55% in equity, which is a 14% expected return with a beta of about 0.5 or 13% expected return with a beta of 0.5, I will go with the profit proportions chosen. I'm not trying to doctor my product allocation as per the revenue I need or my belief in a product. I am again marrying it back to my client's objective. There are several clients. We said we will not take your money. If he says, we are not interested in selling a product, you don't tell me the full assets. It becomes difficult for me to address even 10% of it. Coming back to the question, I'm not either trying to grow one leg or another leg. I'm putting in a lot of effort to bring more money in equity mutual funds when the market is down, which implies the market bounce back. Now you see September number in industry, ironical and I feel bad as an industry participant. The net flow in September is INR 30,000 crore total and SIP is INR 29,500 crore. Isn't that the month where you would buy? The average of Nifty is 24,700. People buy what people sell. What is what people buy? That's exactly opposite you have to do. Clients will always be attracted with their heart because it hurts them to see no return for Vanyam and gold is going to become 55%. You have to counsel them and say sir, please don't have recency bias. That's the biggest pitfall of investing. I'm not saying I will sell more mutual funds. I will sell more mutual funds at the right time because I am plugging in gaps rather than selling what sells. Trying to let me correct myself. Trying my best. Am I succeeding everywhere? The answer is a big no. Am I 5 on 10? The answer is yes. Will we improve? God knows. Will we try? Yes. All right. This question, another question is on Global Finance Ltd. Gross NPA in that books on FY2024 was 2.15% while it kind of improved significantly to 0.61%. I don't know whether this is a platform to be asked that question. Why? What drove that improvement? Any thoughts or any colors that would be helpful? Anand Rathi Global Finance is one of the best credit I have seen in my professional career. I have been into a structured product from June 2006 where reliance on the PMS platform issued a medal product. From there on, if there is any credit which you now, of course, this is a microscopic question saying that it is the meticulous management encompassed in an adjusted Z score you can calculate 1964. I'm sure all of the learned people here would have known and that's a very good predictor of default risk. They've improved every single time. That's how meticulously it's managed. Of course, there is a lot of lending also given to Anand Rathi Wealth Ltd. clients which is against mutual funds. INR 3,000 to 4,000, 5,000 crores is lent to our own clients against mutual funds, which to my mind is like the most safest lending. Jugalji would be the best one to answer. Sorry, why am I taking it away from Jugal sir, who do you want to take this question? We have been maintaining the GNPA and net NPA under 1%. The number 2.6%. I think what is happening that pertains to post-Covid, it was 2022-2023, not in 2024, it was 2.6%. It was about 1.26% which has come down to 0.6% in financial year 2025. Anyway, you need any clarification or exit number, you can get in touch with Vishal. He will share with you the data. The only good thing which we have been doing in NBFC is that philosophically, whatever balance sheet breaker which is there, about 60%, 65% which we have in government securities and AAA bond, and the lending which we have done, one of the major principles which you follow is we don't take any undue risk and all our portfolio is secured portfolio. We are not doing any unsecured lending over there. The business we are in is not the lending, it is the collection business. The whole focus is on that. That is what ensures that our net NPA is one of the best in the industry at 0.4%. Got it. Last question from my side. Any guidance on how should we look about cost going ahead into FY 2026 full year and FY 2027 in terms of employee cost and overhead? Basically looking at how the margins should kind of pan out. Yes, margins. The one concern we love is the employee cost. Okay, call it the Mitha Kacha because if it's getting credited into individuals' bank accounts. That is a very formula-driven thing. That formula has not changed for the last 18 and a half years now. That is a very static cost. When people who are not in the bonus category get into bonus category, there is some degree of operational efficiency possible there. Second is we have always kept a benchmark. Rakesh Rawal says Charlie and Pat, this is the number which we internally want to keep it sacrosanct. The answer is yes. Till that time we like to reinvest. Can you expect a margin of 30%, 32%, 33% on CAT for the next couple of years? Yes, but 30% is what is my mandate otherwise. Rakesh sir, thank you so much. Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Feroze Azeez for closing comments. Over to you sir. Thank you so much everyone. I'm sure you're tired of my voice but yeah, I'm again there to give you a conclusive remark. I'm so grateful to you to patiently listen to us, patiently trust us over the last 16 quarters. I say that this Diwali Samvat 2082 is the best for you so far. May you have a great week ahead. If you have any questions whatsoever, please feel free to reach Mr. Vishal Sanghavi, our Head of Investor Relations, Rajesh Bhutara who's been our CFO for several years. Happy Diwali to all of you. Thank you for joining in and thank you Chethan, Vishalji, and Rajeshji to be a part of this call. Thank you madam. Thank you so much. Thank you very much on behalf of Anand Rathi Wealth Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your lines.