Operating margin falls 16.37 points as expenses surge in Q4FY26
Standalone net profit still rose 41.14% YoY, helped by other income that made up 48.37% of pre-tax profit.
Filed 09 Apr 2026, 12:28 IST · Anand Rathi Wealth Ltd (ANANDRATHI)
Key takeaways
- Standalone net profit rose 41.14% YoY even as operating profit fell 6.28%.
- Operating margin fell 16.37 percentage points QoQ as expenses rose 29.49% while revenue slipped 0.78%.
- Other income contributed 48.37% of pre-tax profit, while the stock rose 4.57% on results day versus a 3.52% median move after past results.
Price around the results
Profit growth came from below operating profit
Anand Rathi Wealth's standalone revenue grew 29.98% YoY, but operating profit declined 6.28% because expenses grew 55.79%, faster than revenue. Net profit rose 41.14% as other income increased 262.91% and accounted for 48.37% of pre-tax profit. This makes the reported profit growth less representative of operating performance.
Q4 marked a third straight quarterly margin decline
Operating margin narrowed 11.60 percentage points YoY and 16.37 percentage points QoQ to 29.97%, extending the decline from 47.37% in Q1FY26 through 46.79% in Q2FY26 and 46.34% in Q3FY26. Sequentially, revenue slipped 0.78% while expenses rose 29.49%, explaining the sharp margin compression. Interest costs fell 4.78% QoQ, but the tax rate increased 0.37 percentage points.
Margin was below the reported financial-services peer median
Anand Rathi Wealth's 29.97% operating margin was 29.44 percentage points below the 59.41% median for 52 Financial Services peers that had reported the quarter. The company was ranked 10th from the bottom on this measure.
Management points to wealth-market expansion and execution limits
Management said strong macroeconomic conditions and a growing number of HNI families are expected to support India's wealth-solutions market. The presentation estimates Indian market capitalisation at Rs 550 lakh crore by FY28E, up from Rs 412 lakh crore in FY26, and says rising equity mutual-fund inflows and better MTM gains could increase market share. Management also said the business is inherently linear because one relationship manager cannot serve thousands of clients, while the company reported the industry's lowest-regret RM attrition and ROE of more than 46%.
The results-day rise was larger than Anand Rathi's usual move
The stock gained 4.57% on the results day, rising to 5.30% after one session and 8.57% after five sessions. The results-day move exceeded the 3.52% median absolute move across the last eight result reactions, although a corporate-action overlap means it was not a clean results-only reaction. Trading volume was 8.89 times the reference level.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹277 cr | ₹279 cr | -0.78% | +29.98% |
| Other income | ₹67 cr | ₹16 cr | +322.47% | +262.91% |
| Expenses | ₹194 cr | ₹150 cr | +29.49% | +55.79% |
| Operating profit | ₹83 cr | ₹129 cr | -35.83% | -6.28% |
| Operating margin (%) | 29.97% | 46.34% | — | — |
| Interest | ₹3 cr | ₹4 cr | -4.78% | -7.12% |
| Depreciation | ₹8 cr | ₹7 cr | +12.35% | +41.54% |
| Profit before tax | ₹138 cr | ₹134 cr | +2.93% | +41.75% |
| Tax | ₹36 cr | ₹35 cr | +4.39% | +43.45% |
| Net profit | ₹102 cr | ₹100 cr | +2.42% | +41.14% |
| EPS (₹) | ₹12.31 | ₹12.02 | +2.41% | +41.33% |
Operating margin of 29.97% compares with a Financial Services sector median of 59.41% across 52 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +4.57% | +5.49% |
| Next session | +5.30% | — |
| 5 sessions | +8.57% | +7.09% |
| 15 sessions | +6.12% | — |
| 30 sessions | +6.44% | — |
Volume on the results session was 8.89× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company expects strong macroeconomic trends and rising HNI families to drive growth in India's wealth solutions space.
- The company estimates Indian market capitalisation will reach Rs. 550 lakh crore by FY28E, up from Rs. 412 lakh crore in FY26.
- The company says increasing equity mutual fund net inflows and better MTM gains will raise its overall market share.
Competition
- The company reports the lowest-regret relationship manager attrition in the industry.
- The company reports a best ROE of more than 46%.
Problems & risks
- A relationship manager cannot handle thousands of clients, making the wealth management business inherently linear.
- The company says building a wealth franchise through aggressive hiring alone is very difficult.
What to watch
- Whether standalone operating margin recovers from 29.97% after its third straight quarterly decline.
- Whether expense growth moderates from 29.49% QoQ while revenue growth returns from -0.78%.
- Whether other income's contribution to pre-tax profit falls from 48.37%.