You have surpassed your FY24 guidance in Q3 itself. What is the look ahead for your company in terms of a strategy for the next two to three years?
Rakesh Rawal: We have always maintained that there is an inherent growth potential in the range of 20-25% in our business and powered by the fact that 10% to 12% is inbuilt, given by God in terms of market growth of our portfolios. So, my stand is the same, that between 20% and 25% growth in this business is there for the taking for many years to come.
Wealth management companies have performed very well with the rise in the number of HNIs and the increasing number of large deals that we have seen in FY24. Will we see the same rate of growth for FY24 or would you say there could be some moderation in FY25?
Rakesh Rawal: We have grown in the 30% range for the last several years that we have been in the market. We projected 20-25% and achieved 30%. This year also, we projected 20-25% and hopefully we should meet that and try and better the expectations. Broadly, the industry is very well poised. There is no reason to believe that there should be moderation. I think that the opportunities are massive and every company should endeavour to do very significant growth this year as well.
What is the outlook when it comes to the progress in capturing opportunities in small towns, in particular the tier I centres? What kind of response have you seen?
Rakesh Rawal: The response has been phenomenal wherever we have been able to set up shop and the basic thing is there is inherent need to get 12-14% return. That is not changing whether it is a person from a midtown or a big town and if you have something that can meet that need for that gentleman or lady, then the response is going to be very good.
So, as long as you have a service which meets the needs of customers and the needs are constant, I do not see why Lux is less in demand in Ranchi or more in demand in Bombay. I think it has a due market in all places.
There are reports that are suggesting that the active AUM is expected to double. So, what is the AUM guidance that you would see for FY25? What are the triggers for your company and in the next couple of years where do you see the company’s AUM headed?
Rakesh Rawal: This year’s guidance is Rs 72,000 crore, which is a 21 odd percent increase and as I said, I do not see any reason why 20-25% growth in AUM should not happen for many years. The trigger for growth is really new money. Last year for example, we gathered Rs 7,000 odd crore of new money. We are hoping to do better than that this year and with years even better. With normal business risks being put aside, I do not see why we should not achieve 20-25% growth.What is the rationale behind the Rs 165 crore buyback in terms of other news?
Rakesh Rawal: We are a business which is cash generating and the need for cash is rather low in terms of any other capex or any of those things and therefore the cash has to significantly go to reward the shareholders and we have been increasing our dividend payouts over the years and we also believe that if we do some buyback, that is another way to reward the shareholders and we are doing the maximum allowable limit to us.In terms of your numbers, on a sequential basis, it is a bit muted. So in the short-term trajectory, at least for Q1, do we expect a muted trajectory? Is it mainly because of the volatility in the market or are there any other factors that could be impacting anything in the near term?
Rakesh Rawal: We have a different strategy to approaching a year. We believe that the first quarter should be the best and therefore increase the probability of meeting your year-end numbers rather than wait for the last quarter to run and meet your targets.
Our belief is that hey, if we have to do 100 for the year, then try and do 26, 27, 28 in the first quarter and that then also creates an organisation which has less anxiety and more happiness and our belief is that if we are happy people within, happy clients, there is sustainability and passion and therefore the probability of meeting targets goes up dramatically if we do that. My expectation is in Q1, we should do hopefully better than the proportionate number.