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Investing.com - Bernstein SocGen Group initiated coverage on Anand Rathi Wealth Ltd (BSE:BO:ANAA) with a Market Perform rating and set a price target of INR2,580.00.
The research firm acknowledged Anand Rathi Wealth’s strong profit growth of 26% and return on equity exceeding 40%, highlighting the company’s financial performance metrics.
Bernstein expressed concerns regarding the wealth management firm’s business model, specifically noting its heavy reliance on market-linked debentures, which account for more than half of the company’s revenue.
The research firm pointed out that while these market-linked products are attractive for both clients and distributors, they require careful hedging strategies to manage associated risks.
Bernstein cautioned that any flaws in risk management could potentially impact growth for Anand Rathi’s distribution business, factoring this consideration into its neutral Market Perform rating.
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