Anand Rathi Wealth (NSE:ANANDRATHI) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY 'twenty seven Earnings Conference Call of Anand Rathi Wealth Limited. Questions after the presentation concludes. I now hand the conference over to Mr. Fidoz Aziz, joint CEO of Anand Rathi Wealth Limited. Thank you, and over to you, Mr. Fidoz. Thank you so much. Good afternoon, and thank you, everyone, for joining the earnings conference call for the quarter and half year ended 09/30/2026.

0:46 Today on this call, we have with us the CFO, Mr. Rajesh Sarbhudra our Head of Relationships Investor Relations, Mr. Vishal Sanvi. Jugal Sarmantri is in Europe, holidaying, so we don't have him on the call today. And this is the first quarter call I'm doing without him, so I missed him in this call. Yes, so I'm very pleased to share that we have delivered another quarter of consistent and fortunately market agnostic performance despite the challenging environment. This is our twentieth quarter result since we got listed in December 2021. And in every quarter since listing with God's Grace, the pad growth Y o Y has been greater than 20%.

1:33 Excluding the impact of non business related items, fair value gains and ESOP expenses and related tax effects. After tax for the first half year of FY 'twenty seven, the PAT grew by sorry, after tax PAT grew by about 23% year on year to $2.38 crores, while revenue increased 17% year on year to INR $6.93 crores. Similar for the Q2 FY 'twenty seven, we reported a consolidated profit, net profit of INR122 crores. Registering a year on year growth of 22%, total revenue during this period rose by about 16% to INR357 crores.

2:19 In the first half year of FY twenty twenty seven, the company has delivered 49% of the full year revenue guidance, which stands at INR $14.15 crores. So 49% penetration on the guidance of revenue and 52% penetration on the pad guidance, 48% more to go of the INR $460,000,000 guided. Continuing our policy of rewarding shareholders, the Board of Directors have declared an interim dividend of 4 per share and after a bonus, so INR 4 per share of the new INR 16 odd crores shares, which are outstanding. In the first six months, we have achieved 52% of the bad guidance of INR $4.60.

3:04 I think that's already mentioned. We've achieved three important milestones in this quarter, which have gone by. The highest net flow ever in the history of Anand Rathi Wealth of the last twenty years happened in this quarter, which went by. And we collected new fresh monies of INR 4,186 crores, which is up 39% from the last year's number corresponding number of FY twenty six quarter ending September. So INR 4,186 crores of net mobilization or new monies with our clients' gratefulness and when the clients realize that this portfolio during bad times can hold up, bad times clients have shared more money with us. Second, we recorded our highest ever quarterly equity mutual fund net flow. Again, in the last twenty years, we have not been able to achieve that. And with your support and client support, we have achieved INR 2,867 crores, up 39%.

4:08 It's easy to say buy equities low and sell high. And clients pragmatically have bought more equity, which shows up in IRRs over long periods of time. Courage translates into IRRs, but not in the short term, in few years. So I'm very happy to note that our clients, unlike the mutual fund industry, has not delivered the best net mobilizations in the first half year. SIPs, of course, have been robust. Lump sums have been low. In that half year and the last quarter, we have had a 39% increase in equity mutual fund purchase. Third, we recorded our highest ever monthly client acquisition in the month of September, which will not be apparent in the result because I'm speaking about September.

4:54 With God's grace and clients, when they see their portfolios doing relatively better, of course, sadly not the best times, They start referring their friends who are with what has happened in their portfolios with aggressive strategy. In our flagship business of private wealth, during the last twelve months, we have added 1,500 new client families on the net basis, bringing our total client families to 14,309. Client attrition rate in terms of AUM lost remained low 0.17 for quarter two FY twenty twenty seven and zero point two six percent for half year FY 2027.

5:40 Of course, these are second decimal numbers, but we would ideally want every client family who trusts us with their hard earned life savings to be satisfied. Regret RM attrition continued to remain low. Two RMs whom we considered regret mathematically, of which one I might want to not call... Mathematically, I can't call that person a non regret. I would say one regret attrition we have had in H1 FY 'twenty seven. Digital Wealth business, which is B2B2C business, registered an AUM growth of 14% year on year and reached INR 2,531 crores, and the number of clients increased 15% to INR 7,584.

6:30 Of our business, Omni Financial Advisor business, which is a SaaS platform, has close to about INR 6,008 hundred and ninety eight subscribers with a platform assets of about INR 1.66 crores at the end of September twenty twenty six. Has to be remembered, these are just platform assets which we report. Also, last quarter, we started operations in London, UK, and we have received requisite regulatory approvals to commence operations in Gift City, India. That's where I stop and hand over the mic back to the may press star and one on the touch tone telephone.

7:18 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. First question is from the line of Prajesh Jant, Rathi Wealth Limited. Please go ahead. Hi. Good afternoon, everyone. So just a few questions. Firstly, broader one. If you have to think about your, say, top 100 customers, roughly in your estimate, what would be the wallet share that Anand Rathi Wealth could have for them?

8:07 Mhmm. Firstly, yes. My top 100 clients, I don't have to think of them because I think of them twenty four seven. So I'm trying to lie to know. Okay. So coming back, because that's where we have the platinum segment. Okay? More than 10 and a half of our clients fall in the platinum segment. What kind of wallet share? It's very dispersed. See, basically, we have this principle of home grow the colleagues, home grow the clients. So we don't lock on the doors of people who have just had a business sale of 200 crores. So I would say that our platinum clients, I can say confidently that 50, 60% of the wallet would be with us. And the same clients, if I see the trend, which is what I think is important, would be upward trend for 95% of the family. So top 100, I would say 60, 70%, and there'll be several with 100% with us.

8:57 That's what So when you see that's part of... When you say the the denominator is the mutual fund net worth, or you are saying of the total network? See, wealth has only one definition. Unfortunately, market defines, however. I'm speaking about wealth wealth includes all the assets, physical also, which they don't live in. Okay. Not just mutual stocks. I count everything as wealth. Wealth is everything one human being has, which he does not consume or aspires to consume. Got that. So second, actually, more of a financial question. We've seen a very including the ESOP cost, we've seen a very sharp increase in employee cost from the time we've given ESOPs, which was in fourth quarter.

9:43 Now how should we see this and model sales next year? Do we see an increase in expense? Ideally, the ESOP expenses is the highest in the first year and then it's on a declining trajectory. Should we go in similar manner and assume that the overall the ESOP cost would decline in next year and possibly the overall employee cost will see a much lower growth in next year? Yes, sir. Noncash expenses, is where ESOP falls, mark to market and noncash expenses, the dispersion between your profit before tax, which is $1.22 crores and this INR 90 crores will reduce. Yes. So to answer your question, will the ESOP cost reduce? Yes. Dramatically, yes. Got it.

10:29 So just one final question is on the M and D part where, you know, anything that worries you on this business, which kind of, say, runs at the top of your mind, that business has been growing well for us. No doubt on that front. But does that... Any any of... Any part of that business worries you in instance? Praise, whatever worries us, we start working on it. Okay. Long before it becomes an actual wolf knocking on our door. So if you ask me, I said the same thing four years back. It doesn't worry me because all the variables which were my risk were identified much before. So does it worry me? No. Does it require professional management to be able to make sure it is not worrisome? The answer is yes. So is it scalable? The answer is a big yes. Of course, people would still take it with a picture of heart because they don't trust the professional who generally people... I don't know why, but, yeah, I would do a straight talk. So... No. Not... Doesn't worry me.

11:30 But, yeah, I know most people won't believe that statement. They did four years back. They don't today. So even in this falling market, you would have given very healthy IRRs on these products? Yes, sir. We would have given. Some of them didn't give the maximum IRR in the last quarter. Otherwise, we had 190 consecutive products. Consecutive products from December 2020 till as much as May, June this year, which is the longest streak of wins any product in the history of Anand Rathi in the history of India would have given expected return, all of them, but that streak broke in this year. And some products didn't deliver the full 14, 15%, but delivered six, seven. None of them in the history of Anand Rathi's issuance from two thousand twelve December have ever lost money at maturity. Do you think the slowdown in the growth now will be a challenge for this M and A business?

12:26 The near term obviously, the question is from the near term perspective, do you see that as a risk for your future flows? I can answer it in two ways. One is, if I don't see a growth of 20, 25% this two quarters, for example, if that's near term, I would have revised my guidance downwards. Got it. Okay. One thing you can expect from us as professionals is courage. Mistakes we do, but we we generally have been taught by both my bosses, mister Rahul, Rathi, that do a straight talk and tell them. So near term, am I worried about the summation of 20, 25% bad growth? The answer is no. If that was the case with the slightest of the probability, I would have revised my bad guidance down from four sixty. And you can expect this from us in the future as well. Now coming to the structured product, long term, do such small cycles or long... Larger cycles also impact structured product business? The answer is no.

13:23 Why? Because unlike another wealth management product, the agility of a structured products is very high. Tomorrow, today, now let's assume. I was I was just speaking to a journalist a few days back, couple of days back, and I said Nifty has stopped representing the Indian broader market because there's a lot of short buildup of FIS in the Nifty stocks because we have opened up some degree of short possibilities there by some regulatory changes. So so if tomorrow on nifty is not a great barometer for me to issue a structure product, can I do it on nifty nifty 500 if there were a future listed? So there is a lot of agility is the point I'm making. If 30% target for five years is too much to ask for in the contemporary situation, can I make a product with 15? The answer is yes. So coming back, long term, the agility of a structured product, which can embed any long term derivative becomes so flexible that you... The... If the interest rates are very high, I will start buying... I will start buying...

14:19 I will start selling calls instead of buying puts or so so basically, if your if your volatility is low, the design changes. If the volatility is high, you will make a low Vega product. If your roles are high, then you will make a low data product. So so, yeah, of course, this might seem... Sound like Greek and Latin, which literally it is. These are Greek alphabets. But... Yeah. But that's the agility the structure product has to become contemporary unlike a long only mutual fund has to be long only. Right? So it... Extent of long is also not calibrated in the category two of equity mutual funds, for example. And PMS is can, of course. But such a product matter may bullishness target So that's the long term indication. Short term, do I worry about the demand? No. I worry about when when do I get my trades to 50%, which I had given the guidance.

15:16 Yeah. Thanks. That's helpful. If I have few questions, I'll come back in the queue. Thanks. Thank you, sir. Thank you. The next question is from the line of Srenik Mehta from IndoAlts. Please go ahead. Hi. I just wanted to... So congratulations for the great set of numbers. Very consistent. You have these HNI clients, which are 50 crores and above. These are big chunk of your overall revenue. I just wanted to understand if the yields that you get are similar for this segment versus, say, the five to 50 growth segment that you that you fetch?

16:03 Absolutely. I get, if not the same, marginally better. Maybe I'm not checked, but we don't give any discount on fee. Economies of scale only increases value added services, but does not reduce fee. So I can proudly say we may be one of the few wealth management outfits who has never taken a check-in direct from a client irrespective the person offered us thousands of crores. So the answer is no. As you go up the pyramid in terms of my clients, that's why we home grow them. So most of my largest clients have been with us for fifteen years. They would have started with 2 crores. Wonderful. Thank you so much. Thank you, Meta, sir. Thank you. The next question is from the line of Sukriti Pathi from my side, Fintreat Private Limited.

16:53 Please go ahead. Good afternoon, Dora. I have two questions. My first question is just for a little bit of forward guidance. Beyond the regular outlook, what are the top two to three education priorities you're focusing on in the next few quarters to drive client act... Acquisition, wallet share expansion, and AUM growth? And alongside that, what do you see as a key risk from market volatility changing the constant changing in investors' sentiment or increasing competition? And how are you preparing to manage them while strengthening the company's overall market share? That's my first question. I'll ask my second after this. Wow.

17:39 This is a question that I can go on and on because you asked me everything practically I do. So... But, yeah, coming to the... On the lighter note, I was saying that. But on a serious note, when you look at our principle, our siddhant or our on which we build our businesses, not do new things every quarter or every year, do the same old thing in a better fashion again and again. What do I do for client acquisition? I do events of my clients, colleagues, societies, very low cost events. I go to their places and collect 15 people. So I have done 130 events. Okay. I don't know. They just. So I have a events department, which don't do those fancy events. They do, of course, but those are not the premise of my acquisition. So if my client loves me, I will say society event. So then he will speak or they actually refer us clients there. If they think I have added enough value in life.

18:40 And if I have 14,000 families, my 7,000 families have finished three, three and a half years. There are 2,500 families who have finished ten years maybe. Right? 2,000 odd. Don't hold me to that number. So those are the guys who actually give me events. That's one way. So acquisition we acquire on the basis of... Now today website leads have become a reasonable source. Now where people reach out to us, thanks to some degree of awareness of our services, they reach out to us. So over the next three, four years, I would see cold calling is something which we don't like we doing because we don't like as human beings receiving phone calls on a Sunday afternoon, random people. So we want to avoid that in the future, but we are building references.

19:26 I've always been 50, 70% of our clientele. We want that plus website leads. People either have to walk up to us or or they have to be referred. That's the destination model in three years. Okay. Great. Thank you. We did in this financial year. So we have done... We shall sort of figure out in the meantime. One sixty five events, we have done. So total events, not loads where where you're trying to brand yourself as bigger and spend gross. That's not it. So that's on the acquisition. Right? Wallet penetration is delivered Jensen's Alpha. Most people don't deliver Jensen's Alpha. If you deliver somebody Jensen's Alpha, in India, Jensen's Alpha is mistaken to be Alpha. Jensen's Alpha deliver grow, that will give you the wallet. And we go with the assumption that my client is smart.

20:12 Of course, that's why he's h a nine... He's 1% or little lesser than 1% of India. So do I have to convince him to give me money or I have to deliver to give him money? Actually, if you think logically, I don't have to convince him. I just have to deliver. Deliver, not absolute return because absolute is not in my control. Trump's top bet. You know? Right? So relative is my my... Relative is in my influence, not even in control. So that's where, like, you do a mutual fund selection out of nine twenty seven. You try and make sure that you beat the nifty or NSE 500 by two to 3% after earning by 1%. Then the client knows, okay, he's accumulating small small buffers like our model portfolio on the equity mutual fund side from 06/01/2013 audited, okay, across thirteen years, has delivered 198% alpha on nifty and about 100% alpha on NSE 500.

21:03 Right? So even if the market fell by 50%, the guy has still beaten nifty in thirteen years. Do understand what I'm saying? So so that is in control. So how do you penetrate into one's wallet by doing finance like a treasury, not like a wealth manager? Great. Thank you. Can I ask my second question? Yes, sir. Absolutely. I hear you, sir. Yeah. My second question is to mister. From operations and financial management point of view, what are the key risks you're monitoring around cost structures, technology investments, and regulatory compliance or business scalability?

21:48 And what measures have been taken to ensure the cash keeps on flowing and margins are maintained at stable rates. Rajesh Buthraji has to only be Rajesh Buthra, and this all will happen because Rajesh has finished twenty five years in this company. Rajesh, sir Yes, sir. Hello. Good afternoon, everyone. Sir. Margin maintain We have maintained all the margin in our case. So thank you, Rajesh. Yes.

22:36 Tell me, Rajesh. We have a strong technology team as well as a strong system. So technology side did not have any issue for our business. Thank you, Rajesh. So to add to Rajesh, sir, one is how we look at cost, we look at it like we don't want operational efficiencies. What do you call that? Operating leverage. Okay. We want to reinvest in our business. 40% is my target. I have to have my PBT above 40%. I have to have my PAT above 30%. This is what has been told by my boss. So it's we try and do that. How do we look at cost? We don't become flamboyant sometimes when things are good, so on and so forth. So point one is our technology gonna become more efficient, our costs are gonna go up, so I don't think it'll go up. Second, are we building our technology very...

23:35 Is it very... On a different tangent than the industry? The answer is yes. So for example, we hired four IITians who are designing algos for me to research. Okay? I'm one of the kind of stuff which happens in a treasury more so. So technology, we will spend some money, but anytime our PAT PBT increases beyond a certain level, we would want to reinvest in strengthening a lot of lot of verticals. Okay? Which is what Rakeshla says, if you have to in good times when your PBT is going to go up more than you expected, 43, 44, 45 is okay. It's a matter of magnitude of 40, if it becomes 48. Now I don't want to impress the shareholders saying that I have operational efficiencies. I would bring it back down by investing in things which I think would keep my business up and running and consistently running twenty years from now.

24:25 Does it answer the I'll can get a little more narrow, I'll tell you. Sorry. You pretty much answered my question. Thank you and best wishes. Thank you, sir. Thank you. The next question is from the line of Mohit Jain from Tata Capital Partners. Please go ahead. I'm sorry to interrupt you, mister Jayant. We are unable to hear you. Your voice is breaking. Can you please check? No, sir. We are unable to hear you. Mister, we are unable to hear you. We will request to please kindly check your connection and join back in the queue. In the meanwhile, we'll move to the next question, which is from the line of Milan Kulkarni from m I... MLDL. Please go ahead.

25:23 Yeah. Good afternoon. How much are the non... Noncash charges in the quarter? So noncash charges and mark to market. Right? Yeah. So noncash charge, I think 40 crore. Noncash charges 46 crore. 46 crore. 46 was it in the corresponding quarter of the last year? Zero, sir. Last year is zero. Last... Same quarter last year was zero? Yes. Yes. Okay. Thank you. Thank you for the questions, sir. Thank you. The next question is from the line of Nikhil Agarwal from Choice International.

26:11 Please go ahead. So my question is, with the minority company, in July 2024, your new subsidiary, Anand Rathi Wealth, SME, it received in principle approval from IFCA. So could you please hold some light around these revenue opportunities you are targeting to us? Okay. If I understand it right, GiftCity, you've got an approval. What kind of revenues would you expect? Or what kind of revenue opportunity do you expect? Yeah. Yeah. Correct? So we are a very India centric organization. So we will use that license as, of course, expected and the license in nature as well to bring money to India.

27:00 And when you bring money to India, we will try and deliver the Indian resident proposition to an NRI. Today, in the Indian resident proposition, we have mutual funds which we choose mathematically, and then we design structure product. So we will try and deliver the same proposition in a more tax efficient fashion to an ANANDRA. That's the expectation. So what kind of revenues are possible? I don't want to count my eggs today. But do I... It's very very exciting times for me if I can get global capital into a already validated proposition? The answer is yes. Will I do anything different? No. Will I do what I have done in a different platform for a larger universe and larger transfers? That is yes. So if, for example, if there is a London guy who wants to invest in India, I would use the platform to be able to offer my India proposition, which has a credibility of fourteen, thirteen, fourteen years to him.

28:00 Okay. So so any team plan for this... Sorry. Sorry to interrupt. Any plans for this year? Yes. See. Yes. So there are lot of advantages there. Should I plan out any revenue, you should go with... For my first 20%, 25% bad growth or revenue guidance for this year, I've not provisioned anything. We've not provisioned anything. We like to see the proof of concept, what our client objections initially, then we meant that. We do a lot of trial and error before we become very confident to put them into our revenue target. Got it. Thank you. Thank you, sir. Thank you. Next question is from the line of Sunil Shah from SRE PMS. Please go ahead.

28:51 Yeah. Hello, hello, fellows and everybody in the team. Always wonderful to have a talk here. Sir, my point was about the setting, and I think we got some clarity there. So it's going to be inward remittances or inward investments. So we are... Are we looking at doing something out of India, replicate our model to take money out of India to the group city as well, or it's just gonna be inward at least to start with? That's that's my first point there. Yes. Sunil, sir. Okay. You want me to answer the first one first? Yeah. Yeah. I guess. Because you paused. That is implied. Yeah. So... Yes, Sunil, sir. In the short term and in the long term current thought process is to only look at inward.

29:39 Because I think India itself requires a lot of homework currently, and I can give you example after example of what kind of research is unraveling our understanding of Indian capital markets. Right now, we were doing a study on 213 derivative stocks. And there's so much understanding still left, and I I I feel ashamed that I've worked in this market for twenty two years. As a professional, I'm still not understood some facets of the hypothesis which I tested. So coming back to the point and not go beat around the bush, it will be inward and even long term inward because we want to miss some opportunities to and have to have focus. Focus is underrated. Opportunities are overrated is our belief. Right? Opportunity is there, but that comes at a cost of focus.

30:26 And we want to master India as much as possible, and I think we are still scratching our surface. And if I told you some hypothesis I've tested, which I'm surely gonna put it on media, will surprise us. India may all kidney research capability. So, yes, sir. Always inward so far. Long term also inward. Great. Great. Good. Good. Very happy to know that. And my second point was on the mutual fund mutual fund license application. Have we done something on those lines? Some some media news are talking. So we have applied for a mutual fund license. And if so, what are your thoughts around that? Rajesh, sir. So so let's... Okay. Which can I So this month, then we applied for the mutual fund license application?

31:14 Okay. We're already in present almost that I prepare. So mostly in the... Up to the October 20, we can file. Oh, by this month end, sir, is expected to file. So then, sir, that is the confidence of Rajesh j. Rajesh j going to follow-up. I am unaware, but he is as prepared as this month end. Okay? And I... Whenever Rajeshji speaks, I feel very happy and excited because he's... He he is one person who has been in this company longer than half my product team was born. Okay. Great. Okay. You speak so much pride because that's where finance is where maximum attention is needed so that you don't slip anywhere inadvertently as well. And thank you, Rajesh. I'm using this platform to acknowledge his contribution to bring us thus far and further.

32:09 Sir, if I can just Yes, sir. This this more more detail. See, essentially, we like the team with the reason that we are focused on the things that we do. So we are taking care of the client wealth, and we are investing in the mutual funds, managing money and the part of distributorship, that's significantly different. What is required for a mutual fund would be more about investment mindset, etcetera, etcetera. So sir, I just wanted to understand, are we digressing from what we are great at? Just wanted to understand this piece, if it is possible to be shared on the platform. Of course, it is possible, sir. Transparency is the least my shareholder can expect, especially Sunil, sir, who has added value to us by every question, all the nineteen, twenty quarters.

33:02 So, yes. So will we digress? The answer is no. Only a platform doesn't imply digression. What you do with the platform implies digression. I could have used Gipsteria to invest in Korea, then it implies digression. Whatever we will do on the mutual fund platform, if somebody can do better, we are not an egoistic platform to try and do it ourselves. We will do something which is not me too whatsoever. If anything can be delegated, has to be delegated is our principle. So why do I need to build a long only ability when I have the stars in the country? What we will build will, again, of course, unfold for people to see, but it's not gonna be me too, for sure. Okay. Fine. Fine. We look forward to that interesting opportunity which will come with us going forward.

33:51 And I don't want to Yeah. Sorry. Spill my beans too much. But I also... But I don't wanna spill my beans too much because I I don't want any shareholder to extrapolate anything before the hexa hatch.. Before... Don't count the chickens, they say. No? So that's why I'm not expressing too much, but I'm so happy and excited for the fact that the group has decided that AMC inside this company. So my shareholder gets to participate on the IPO built here, which can also be executed on a mutual fund plan. I don't know whether I've been able to articulate that well enough. I was very excited to have that as a fully owned subsidiary of ARWL, which is 6050% free float or even more.

34:39 Sure. Thanks for all this. All the best and look forward to many more quarters of growth from the company. Thanks. All the best to each and everyone. Keep working for the long standing shareholders like yourself. Thank you. The next question is from the line of Arun Gopal from Red Tree. Please go ahead. Yes. Good evening, and congratulations to you and your team for consistently performing even in testing time. So the question is Okay. Yes? I hope I'm clear. Yes, Arun, sir. I can hear you very clearly. Yeah. Our assets have crossed around 101.08 lakh crores in milestone, which is good, which is an 18% growth year on year.

35:27 Could you help breakdown how much of the growth is driven by the new money, which includes versus the mark to market gains from the performing equity market? And what's the target for the net inflows if the market volatility increases in the coming quarter... Coming half yearly? Arun, sir... Nava, sir, we have a target of 1.2 lakh crores for the year on the AUM. Okay? Okay. We have a target of generating net flows of $6.07, 8,000 crores with God's grace for the residual year. The mark to market so far has not contributed too much in the last quarter. Since our mutual funds delivered stupendous excess returns, it has helped us keep the number 2,000 crores more from the last quarter end in spite of one of the worst quarters for Nifty. How much is the Nifty, sir?

36:24 Nifty fell last quarter by about 8%, 7%. One second. Vishal is checking. In spite of that, we brought in 4,000 crores. Ideally, if there was zero mark to market, we should have been at 1 lakh 10,000 crores. So there is a INR 2,000 crores mark to market loss this quarter. Okay. So Nifty is down 5,000, 5%. Our total overall assets would have fallen about 1.5%. Okay. So will we get to INR 120,000? Don't know. But will we get to the next flow of INR 3 crores, 4,000 crores for the next two quarters? We'll try our best. So that will mean if we get some 23% mark to market, our most volatile guidance, which is AUM because it depends on and so many other external variables, is the most volatile one, unlike revenue and guidance because AUM is captured on one single day, September 30, March 31.

37:20 So we have a target. That's the... It answer, Arun, sir? Yeah. It does answer. Thank you very much. Thank you. Sir, for your question. Thank you. The next question is from the line of Ravi Shankar, an individual investor. Please go ahead. No. My question on ESOP was asked and answered by Thank you. The next question is from the line of Sunil from Diamond Asia. Sir, thank you for the opportunity. Sir, two questions. So firstly, among the net flows, what would be a broad pickup between, let's say, your existing clients and new clients if you could share? How do you look at that?

38:16 Yes, sir. I can tell you this intuitively. Of course, we shall give precise number. How we look at it, sir? We don't push clients to start big. Okay? So, generally, our 70% of the net sale is generally 60 to 70% will be existing clients. Because unlike other private wealth companies who will say start with 5 crores, we say start with 1 crore as long as you have 10 somewhere. I will prove my merit over a period. Of course, in bad times, becomes difficult to prove to the initial clients, new clients. So I'm now conceptually wanting to answer rather mathematically. I'll come to the mathematics of it. Conceptually, we've always, as a wealth management outfit, my boss has told me, be secure in your skin. Don't push them to start big.

39:03 Business confidence So if I got some 200 clients last month or more than that, I would tell people start with 1 crore, 2 crore, no problem. So if I get thousand crores in that month, hypothetically, then I would get 75% from existing clients and $2.50 crores or the new my clients would be about 1 crore, 1.5 crore each. But we generally try and validate whether each of them have the money to give me. If they have 10 crores to give me, I'll start with 1 crore. No problem. If I deserve it, you will give me. That's the hypothesis. Now coming to the exact number for the last quarter. 62 is two is existing, 38 is new, sir. Okay. Okay. Thank you, sir. Very helpful. Right.

39:48 Secondly, let's say if you look at your business from strategy strategy plans for the next next three, four years. So what are, you know, the key areas where you would like to focus on? So let's say, you know, get deeper into existing clients' wallet share or expand more geographically geographically, or are you looking at new products? How do you look at a business? Sir, I'm... Okay. Let me... Again, my mind did sound a little philosophical. We are only focused only focused primarily. We are we are... Obsessed is a bad word. We are... Okay. Let me use the word obsessed. We are obsessed with client outcomes. Everything else follows. So now coming to... We are looking at how do we deliver 6%... Five to 6% Jensen's alpha to client.

40:36 That's the sole minded focus of one eighty two research people. Also, my relationship managers, they have to implement advice. That is when for our concepts translated to money into portfolios. So our sales fraternity, if you have to call them that, which I don't like to call them, the wealth man... The delivery engine, which is account managers and RMs, which is about 900 odd people, are focused on making sure that paper money becomes actual money. You don't have to walk up to a client and say, I told you so. That doesn't help the client. Right? It just makes me feel good about it. Oh, I said this, sir, you didn't do, but I told you so. So first, in the topic of what are we focusing on, if I went straight to your answer, it will be unfair to not tell you what we are obsessed about. We are obsessed about client outcomes. In the environment, of course, my new clients may not be happy. They're saying I'm making 2%, 3%.

41:32 Yes. Now coming to what are we focusing on? We are focusing on all four engines. The first engine is client's performance. If clients make 12% this year, my revenue next year goes up by 12%. The second... This is what I touched upon. The second thing which we are focusing on is capacity utilization. Today, we have 431 relationship managers still having a capacity to handle 8,000 more clients. So I'm submitting to my existing clients to refer me to my... To their friends if they think I will not be unfair to their friends. So that's an utilized capacity. That's the second thing we are focusing on. Client are generously referring their friends, which is a win win. Third, I'm focusing on new plant and machinery or new capacity, which is our relationship managers. We are for the future, which are our account managers, which is 500 people, some from IIM, some from CA background, some from now IIT, some from basic colleges, but intelligent, sharp, genuine human being. The next 100 RMs are already identified and being trained to be promoted in the next one year, one and a half years, but we have some capacity constraint in terms of how many do we want to buy before we can choose. So that's the third leg of growth. And the fourth and the final leg of growth is the penetration into client's wallet, which is my fourth leg of growth.

42:49 Existing assets, if there is mark to market, my revenue increases, capacity utilization, capacity creation, and lastly, penetration. I... We we may have more than 1 lakh crore plus with the same set of 14,000 families who are evaluating us at different stages of life. Somebody who has evaluated me for ten years is a full sole advisory client like that. So these are the four things we are focusing on, performance, penetration, capacity building and capacity utilization. Very helpful, sir. Thank you for thank you so much for your time. All the best for coming. Thank you for your kind questions, sir. Thank you. The next question is from the line of Shoti Khatti from Ambit Wealth. Please go ahead.

43:35 Yes. For taking my question. Sir, just two questions from my end. Firstly, how the... If you can just, you know, brief us on how the MLDs work and how the IRR on this product has, you know, worked over the years in the bad and the good markets? And secondly, how you tap the HR segment? You all... Already did mention that you do conduct the events and help you to come up with new clients. But apart from that, more, you know, into into the fact that how do you tap our clients and how it is different versus peers. Great. So firstly, structure products, how do they work? There's a lot of content on the secondary space. If you said, for those of these explaining structure product, they'll be there enough.

44:27 But let me give you a sense of it. Structure product issuance requires some NBFC who is not very flamboyant with their names. They have to keep the money safe. That's the first condition. And most NBFCs who issue structured products don't want to keep 50 percent in investments. Generally, an NBFC who issue structured products, which has some derivative hedging to be needed, has to have 50, 60% of their money in a DMAT account. That's the first step to keep the money safe. Market for markets. You need to have margin enough to hedge it correctly as per the black strong's pricing model. Then you embed their long term derivatives depending on delta, gamma, Vega, Theta, those opinions. That's the second thing. Third, you have to back test and get your outcomes such that your front test, we're using Monte Carlo simulator, should always supersede your back test results.

45:13 That's what... Like most of the products which we have designed and launched from the last fourteen years would have shown shown a probability of 90% of the victory, but actual transpired is 10, 94, 95%. That's where the Monte Carlo simulator needs to throw up in the future. Probabilities have to be greater than past probabilities. On that whole thing, you will design two things and continue the same two things 2000 Right? So we do the same product. So the product I did in 2012 to interrupt, miss Jyoti, may I request you please mute yourself while management is answering? There is a distance from your line. Thank you very much. Sir, you may please continue. Yes. So how has been the output? Monte Carlo simulator, when we designed it, told us '94. It delivered 94% of maximum outcomes.

45:59 Backtests are very short period of time. So we don't do part dependent products. We do only independent products. All our learnings, which I learned in Religare and Macquarie when I started issuance when I... From two thousand sixteen, six, whatever mistakes I did, became an embargo to not do here. And do the same product, clients tell you to design customized structure products. We say, sir, you don't understand embedded derivatives. You don't understand option Greeks first order, so you will not customize. If you want to buy what I put on the table, buy it because for you to customize, you will have to run so many models. So then unlike most wealth management outfits who are ready to design anything for anyone, we don't customize such a product. If somebody want customization, then they need to understand option Greeks so deeply.

46:45 Third order Greeks have to be understood. So so what do we do in structured products? We embed derivatives which have a larger probability, not certainty of victory. That's why all the 1,900 products approximately matured and not lost money in spite of they having matured, some of them having matured in COVID. So that's one. Second, how do we... We don't acquire Ultra HNI. We build Ultra HNI. That's the key difference. Today, newspapers can tell you who sold the biggest property, who sold the biggest business to a private equity guy, who did an IPO. Those information is available. So most wealth management office go to those doors saying that I will do it in low cost, come to me. So we say we don't do it in low cost. If I don't deserve 1%, I don't want to be on that table. I will try and do my best to add value to you and earn my 1%. So we don't go to ultra high street unless he's my client's friend.

47:33 We take a client with 5 crores, 7 crores, 10 crores, and bill them to hundreds of crores if that answers. Yes, sir. Thanks. Thank you. Thank you, madam. Thank you. The next question is from the line of Anish Pavar from Ventura Securities. Please go ahead. Congratulations on a good set of numbers. I had a question that what are the primary and secondary issuances of MLDs for this quarter? Which answer will give you update? The primary for the quarter was 4,200 crores. Sorry, sir.. Primary thousand crores. 2,073.

48:24 2,073. Total? And the secondary is for the quarter is $7.50 or so. $7.50 secondary, 2,000 odd in primary. Okay. Thank you so much, sir. Thank you, sir. Thank you. The next question is from the line of Anand Rathi from A3 Capital. Please go ahead. Hello. Hello. Anand? Yes, sir. Sir, there was a news article that the has has preparing to give the portfolio managers also the mutual fund advisory services. So any take on it, sir?

49:10 The Yes. Well, I have actually... Yeah. On this subject, I've spoken some time back that most people who surrendered their advisory license were using a PMS license to run a mutual fund portfolio. So, basically, SEBI has regularized rate by creating PMS where mutual funds can be bought. So I I think in a mutual fund, a PMS platform is not so required because mutual funds, you don't transact every day. In stocks, you transact every day. In PMS, I don't know why only to charge a fee, PMS becomes easier because if you are a registered investment adviser and you go and take a check from a bank account, it is not very easy. So I think registered investment advisers will find it very useful because if you put mutual funds in a platform and then charge them on... In terms of units with the power of autonomy, it becomes lesser emotional drain for an Indian to pay a fee, especially during bad markets. So does it have a huge merit for registered investment advisories to move into mutual fund PMS platform? The answer is yes. I don't see a reason why a client, especially in the S and I segment, needs to delegate a discretionary mandate to something which he transact two times a year.

50:25 No, sir. I was just asking whether it will be competitive. It will not be competitive for us. Sir. No, sir. Not at all. Thank you, sir. Best of luck for the future. Thank you, sir. Thank you. The next question is from the line of Saurabh Jagyatar, an individual investor. Please go ahead. Hello sir, good afternoon. Good afternoon sir. Congratulations on your numbers and also on the approval for a Gibsity operating, sir. And my question is, when do you think could that become operational? And initially, how many funds are you planning to launch? Shalta, two. And in the next two, three months latest, by the next quarter, I think we would be able to give them a good news in January results, month, December. Yes, sir. So in in a couple of months, not too far, and two months.

51:23 Thank you, sir. That was all Thank for great you, sir. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Feroz for closing comments. Thank you, madam. I'd like to thank everyone for being a part of this call. We hope we have tried to answer your questions. If you need any more information, please feel free to reach out to Mr. Vishal Sanghvi, our beloved Investor Relationships Head and Rajesh Thabutra, our beloved CFO, which while wishing everyone a very happy Diwali in advance because we're going to speak after Diwali and hope the festival season brings joy and prosperity to one and all. Thank you to spend time on a Monday evening.

52:09 Have a wonderful week. Thank you. Ladies and gentlemen, on behalf of Anand Rathi Wealth Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.