Profitability in line; yields on ARR assets flat sequentially

Company
20 Jan 2024
5 Min read 
  • 360ONE WAM reported 3QFY24 results in line with estimates.
  •  Total revenue grew 6% YoY, driven by a 9% QoQ increase in ARR income.
  •  Total opex rose 24% YoY, higher than expected due to increased employee costs.
  •  PAT grew 13% YoY in 3QFY24.
  •  Total AUM rose 32% YoY, led by growth in ARR assets.
  •  The company has approved an interim dividend of INR4 per share.
  •  EPS estimates for FY25/FY26 have been revised down to factor in higher costs.
  •  Retentions on ARR assets and wealth management have improved sequentially.
  •  The company is in an investment phase and has added new hires to its wealth sales team.
  •  The CIR is expected to reduce to 47-47.5% by the end of FY25.
  •  The company is diversifying its presence in terms of client segment and geography.
  •  Flows are expected to increase in the next year, with potential new business adding INR100b.
  •  Yields on new businesses are expected to be in the range of 70-75bp.
  •  The company retains a BUY rating with a one-year TP of INR770.
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