Anand Rathi Wealth Ltd (ARWL) reported a significant contraction in profitability for the June quarter, with Ebitda margins dropping to 34% from 47% a year earlier.
The decline was primarily driven by a one-time employee stock ownership plan (ESOP) charge, which pushed employee costs up 53% year-on-year.
Livemint noted that total expense ratio (TER) compression is expected to continue, adding further pressure on profitability metrics in the coming quarters.
Despite the margin pressure, the Mumbai-based wealth manager maintained robust asset under management (AUM) growth and strong client retention figures.
The results present a mixed picture for investors.
While the top-line growth and AUM expansion suggest underlying business strength, the margin compression raises questions about near-term earnings sustainability.
Livemint noted that total expense ratio (TER) compression is expected to continue, adding further pressure on profitability metrics in the coming quarters.