Waterfield Advisors’ scale grows 58% in FY22 with sound economics

Wealth advisory and management consultancy company Waterfield Advisors registered a 58.4% growth in its operating revenue to Rs 28.83 crore during the fiscal year ending March 2022 from Rs 18.2 crore in FY21, as per its annual financial statements with the Registrar of Company (RoC).

Fees from advisory services found to be the vital income source as it contributed over 93% to operating revenue. The collections surged 47.8% to Rs 26.9 crore during FY22. The company also collected Rs 1.93 crore in revenue as management fees during FY22. It’s worth noting that the revenue from this vertical was nil in the last fiscal year (FY21).

The Soumya Rajan-led company helps its clients to plan, structure and manage their family wealth on behalf of their family offices. The firm manages assets worth nearly $4.3 billion and 150 offices. Waterfield is also looking to expand its business in Singapore, the UK, the US and the Middle East.

On the expense front, employee benefit expense emerged as the largest cost center for the company accounting for nearly 76% of the total expenditure. This cost soared 46.4% to Rs 27 crore in FY22 from Rs 18.44 crore during FY21.

Software subscription cost for the company remained flat during FY22 to Rs 1.98 crore. Legal/professional and rent costs of the Mumbai-based company increased nearly 59% and 9% to Rs 1.91 crore and Rs 1.72 crore during FY22.

Marketing and promotional expenses shot up 3.6X to Rs 84 lakh in FY22 from Rs 23 lakh in FY21. In total, the annual expenditure of the eleven-year-old company surged 43.3% to Rs 35.57 crore in FY22 as compared to Rs 24.83 crore during the fiscal year ending March 2021.

The growth in the scale of the company helped it control losses by 11.7% to Rs 5.44 crore in FY22 from Rs 6.16 crore during FY21. On a unit level, the company spent Rs 1.23 to earn a rupee of operating revenue.

As the scale ballooned, it helped the company to better its ratios. EBITDA margin and ROCE improved to -17.37% and -11.17% in FY22 from -31.65% and -41.07% during FY21.

In February, Waterfield Advisory raised $6 million in a Series B round from family offices, ultra-high net worth individuals and existing investors. The company has displayed a decent financial performance in the last fiscal year as its scale jumped over 58%. It also managed to control losses which is an indication that the company may turn profitable in the ongoing fiscal year. However, Waterfield also raised capital at the fag end of the last fiscal year and the company may prioritize growth in FY23 over economics.