360ONE - 360 ONE WAM LIMITED Share Price

Management provided an optimistic outlook, highlighting that for FY26, 360 ONE WAM aims to achieve a 20-25% growth in Assets Under Management (AUM) and a 16-18% growth in revenues, coupled with a similar growth in profits. Key forward-looking points include:

1. AUM Growth: The company targets a 20-25% increase in AUM, aiming for annual additions of around 12-15% from the existing base.

2. Revenue Goals: Management anticipates a revenue growth of 15-20%, driven by strong net flows and the integration of new business initiatives.

3. Strategic Collaborations: The collaboration with UBS AG, where UBS will acquire a stake of 4.95% at Rs 1,030 per warrant, is projected to enhance growth by tapping into inbound referral opportunities. This initiative is expected to significantly increase the company's service offering for domestic clients seeking global wealth management solutions.

4. New AUM Acquisition: The integration of UBS AG's India wealth management business adds approximately Rs 26,000 crores of active AUM and recurring revenues estimated between Rs 45-50 crores.

5. Financial Performance Indicators: In FY25, the company reported a total AUM increase of Rs 2,46,828 crores (up 23% YoY), and total revenues rose by 35% YoY to Rs 2,652 crores, with the highest annual PAT of Rs 1,015 crores (increase of 26.6% YoY).

6. Focus on Recurring Revenue: The emphasis remains on ARR assets, with ARR revenues growing by 28.2% YoY to Rs 1,701 crores, accounting for 70% of total revenue from operations.

7. Cost Management: Management expects gradual improvement in the cost-to-income ratio, currently at 45.9%, reflecting ongoing efficiencies and productivity from new business teams.

These strategic initiatives and performance metrics suggest a robust pathway for sustained growth and profitability in the upcoming fiscal year.

Q&A Summary from the Earnings Call Transcript (April 23, 2025)

1. Prayesh Jain: "Could you elaborate on what do you mean by exclusive arrangement with UBS?"

   • Karan Bhagat: The exclusive arrangement means UBS is our sole partner for clients wishing to open global bank accounts. Although we won't limit our asset management offerings solely to UBS, we'll provide clients access to top global products. Conversely, referrals from UBS's global clients needing Indian accounts will exclusively come to us.

2. Prayesh Jain: "What could be the big revenue opportunity from this collaboration?"

   • Karan Bhagat: While exact figures aren't clear yet, there are several revenue synergies such as client referrals and improved access to products. We expect growth from capturing clients' portfolios, but aligning revenue with the capital raised is complex. We anticipate operational uses from the capital raised, with Rs 800-900 Cr in our NBFC growth.

3. Mohit Mangal: "Can you break down the Rs 26,000 Crs of UBS AUM into ARR and non-ARR?"

   • Karan Bhagat: Approximately, it's a 30:70 split between ARR and non-ARR. We aim to boost current yields significantly as we integrate these assets.

4. Mohit Mangal: "How do we see FY26 in terms of net flows?"

   • Karan Bhagat: We aim for a 12-15% annual AUM growth and about 8-10% on mark-to-market, resulting in overall AUM growth of 20-25% with correlated revenue and profit increases.

5. Nidesh Jain: "How should we think about the return on equity?"

   • Karan Bhagat: We anticipate that the increased capital from the UBS transaction will initially dilute our ROE, but we expect to sustain ROE around 20% through strategic growth across various segments, including eventual utilization of UBS's offerings.

6. Aejas Lakhani: "How do you see talent flow dynamics changing?"

   • Karan Bhagat: We've experienced some turnover but are confident in our ability to attract top talent. While some exit may reduce AUM temporarily, our strong management and existing talent prevent major setbacks in operations.

7. Harish Subramanian: "Will there be revenue sharing in the UBS agreement?"

   • Karan Bhagat: Yes, we have mutual referral fees outlined in our collaboration agreement; it's structured to benefit both parties as we grow our international client base together.

8. Akash Vora: "Is there a non-compete agreement with UBS?"

   • Karan Bhagat: Yes, the agreement includes reasonable non-compete clauses, ensuring both parties can focus on their strengths while collaborating effectively.

These questions and corresponding answers highlight the key focus areas of 360 ONE WAM Ltd., particularly the strategic partnership with UBS and its implications on the company's revenue dynamics and operational strategies.