360ONE - 360 ONE WAM LIMITED Share Price

In the recent earnings call for Q2 FY26, management at 360 ONE WAM highlighted a robust growth trajectory and positive outlook for the upcoming quarters. The company reported a total Annual Recurring Revenue (ARR) AUM increase to Rs.2,95,000 crores, marking a 22% year-on-year growth. Wealth ARR AUM surpassed Rs.2 lakhs crores, driven by strong net flows of Rs.32,132 crores in H1 FY26, with Rs.8,734 crores flowing in Q2 alone.

Looking forward, management indicated a confident outlook for H2 FY26, projecting net flow guidance of 10% to 12% of opening AUM for the entire year, with expectations to maintain a quarterly run rate of around Rs.9,000 crores. Management mentioned that this sustained momentum would be fueled by ongoing recruitment of senior teams, anticipated institutional mandates, and new product launches, particularly in the EIF and SIF segments.

Financially, the ARR revenue grew by 39.4% year-on-year to Rs.554 crores, constituting 73% of total operational revenue of Rs.813 crores, which increased by 32%. The highest-ever quarterly profit after tax (PAT) reached Rs.316 crores, reflecting a 28% year-on-year increase. The tangible Return on Equity (ROE) was reported at 20.6%, with expectations for further improvement as capital investments in lending and alternate businesses mature.

Management also addressed the integration of B&K Securities, enhancing revenue sustainability and reducing volatility in earnings, and highlighted a strong retention rate of 76 basis points in ARR. An interim dividend of Rs.6 per share was announced, underscoring confidence in operational performance.

Overall, management conveyed a bullish long-term outlook for India's wealth and asset management sectors, bolstered by structural growth dynamics.

Q1: "Are you able to maintain the guidance of 12 to 15% of opening AUM for the entire year?"

A1: "Yes, net flows are strong and we anticipate maintaining our guidance. In Q2, excluding UBS, we reached nearly 8,000-8,500 crores in flows. With our capital markets being active and multiple new teams joining, we are confident about maintaining the 10 to 12% guidance for the year."

Q2: "What's the outlook for the cost to income ratio?"

A2: "We expect the cost to income ratio in the next 3-4 quarters to be about 47-48%. By Q3 of next FY, we aim for 45-46% as we scale our core businesses. In core businesses, we could reach 45-46% even sooner."

Q3: "How long does it take for a new Relationship Manager (RM) to break even?"

A3: "For a fully new RM, breakeven is typically around 2½ to 3 years. However, since many join with existing books of clients, we can expect a breakeven in about 18-24 months for senior RMs."

Q4: "How much of the 2,450 crores from UBS is being allocated?"

A4: "Currently, 55-60% is directed towards our NBFC capital, while the remaining 35-40% is for Alternate Assets. We will decide on the exact allocation closer to the conversion of warrants."

Q5: "What drives your TBR income this quarter?"

A5: "Transaction activity remains robust, boosted by B&K's business integrated into our offerings. Approximately 15-20% of TBR relates to core equities, with about 25-30% from unlisted transactions."

Q6: "What's motivating the increase in retention rates in the AMC segment?"

A6: "The rise to 58 basis points retention reflects stronger performance in our ensuring quality of service and performance. External market conditions did influence fluctuations in retention as well."

Q7: "What's the split between new and existing customers for flows?"

A7: "About 30-35% of our flows are from existing clients. Of total flows, we estimate 90% of new flows are from new customers, while gross flows show approximately a 65-35 split favoring new clients."

Q8: "What's the visibility on carry incomes going forward?"

A8: "Our carry accrual is conservative; we recognize it only 18 months before funds mature, starting at 10-15%. Recent funds aimed for carry recognition started accruing last quarter, reflecting strong gains."

Q9: "Could you clarify the specific revenues from B&K transactions?"

A9: "B&K's revenue is in the range of 15 to 16 crores monthly, equating to around 40-45 crores quarterly, similarly to what we disclosed during the acquisition."

Q10: "What are your expectations for the future of the UHNI market?"

A10: "The UHNI landscape is expanding, with new players likely entering within the next 2-3 years. While we hold about 8-11% market share, growth makes room for more participants beyond the current mainstays."