Anand Rathi Wea. (ANANDRATHI)

FairStock Score: 58/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Exceptional profitability with ROE of 54.35% and ROCE of 56.26%.
• Strong growth record: 5-year revenue CAGR of 22.06%, sales growth of 20.14%, and profit growth of 29.44%.
• Financially healthy: debt-to-equity of 0.08, Piotroski F-Score of 8/9, and Altman Z-Score of 19.42.
• Positive free cash flow of ₹345 Cr and latest quarter net margin above 34%.

Concerns

• Extreme valuation: P/E of 69.75, P/B of 44.50, EV/EBITDA of 55.96, and PEG of 4.09.
• No margin of safety: price far above Graham Number of ₹283.37 and DCF value of ₹1,870.35, with margin of safety at -985.49%.
• Dividend yield of only 0.34%, making returns entirely dependent on future price appreciation.
• High expectations leave little room for any growth disappointment.

AI Analysis

When I look at Anand Rathi Wealth, I see a high-quality business, but I also see a price that leaves almost nothing for the future. The numbers are striking: return on equity of 54.35%, return on capital employed of 56.26%, and a debt-to-equity ratio of only 0.08. That is exactly the kind of asset-light, capital-efficient franchise that Graham admired. A Piotroski F-Score of 8 out of 9 and an Altman Z-Score of 19.42 suggest financial soundness, while free cash flow of ₹345 Cr tells me the earnings are not just paper profits. The growth record is genuinely strong: 5-year revenue CAGR of 22.06%, sales growth of 20.14%, and profit growth of 29.44%. The latest quarter's ₹100 Cr profit on ₹290 Cr sales gives a net margin above 34%, which is extraordinary for a financial products distributor. But as Buffett says, a great business at a terrible price can still be a bad investment. At ₹3,612.30, the stock trades at a P/E of 69.75, a P/B of 44.50, an EV/EBITDA of 55.96, and a PEG of 4.09. The Graham Number is only ₹283.37 and the DCF value is ₹1,870.35; the current price gives a margin of safety of -985%. I cannot call that value investing. Even with a strong F-Score and low debt, the valuation assumes perfection. The dividend yield of just 0.34% means shareholders rely entirely on capital appreciation. I would classify this as a fast grower, but it is not in my circle with this entry price. I would wait for a far lower price, or for earnings to catch up with the multiple, before committing capital.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer