360 ONE — Q4 FY25 earnings call

Call held 23 Apr 2025

Management summary

360 ONE delivered a strong financial performance in FY25, achieving record PAT and robust revenue growth, primarily driven by a significant increase in ARR AUM and net flows. The company made strategic moves with the integration of UBS India's wealth management business and the completion of the ET Money acquisition, further solidifying its market position. Despite some talent attrition impacting Q4 flows, management provided optimistic long-term growth targets for AUM, revenue, and PAT, while also detailing the capital allocation strategy for its recent warrant raise.

Highlights

  • Total Revenues for FY25 grew 35.0% YoY to Rs 2,652 crores.

  • Annual PAT for FY25 reached a record high of Rs 1,015 crores, up 26.6% YoY.

  • ARR AUM increased 23% YoY to Rs 2,46,828 crores, driven by strong net flows of Rs 25,974 crores.

  • Wealth ARR net flows for FY25 stood at Rs 22,334 crores, a 42% YoY increase.

  • Cost-to-Income ratio improved to 45.9% in FY25 from 48.7% in FY24.

  • Board approved FY26's first interim dividend of Rs 6.0 per share.

  • Integrated UBS India's wealth management business, adding approx. 26,000 crores of AUM and Rs 45-50 crores in recurring non-lending revenues for a consideration of Rs 307 crores.

  • ET Money acquisition approvals received in Q4, adding ~Rs 33,000 crores TBR AUM and ~Rs 1,750 crores ARR AUM.

Key financials

  1. Total Revenues ₹2,652 Cr +35%YoY
  2. PAT ₹1,015 Cr +26.6%YoY
  3. ARR AUM ₹2.47L Cr +23%YoY
  4. Wealth ARR Net Flows ₹22,334 Cr +42%YoY
  5. ARR Revenues ₹1,701 Cr +28.2%YoY
  6. Cost-to-Income Ratio 45.9%
  7. Tangible RoE 24.3%

What they filed

Q1 FY27: revenue up 34.6%, net profit up 16.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue865 780 821 911 1,098 +27%1,181 +51%1,115 +36%1,226 +35%
EBITDA541 444 461 566 697 +29%725 +63%663 +44%773 +37%
Net profit245 276 250 285 315 +29%327 +18%289 +16%331 +16%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Dividend ₹6/share (interim)
    Before we deep dive into financials, we would like to highlight that the Board has approved FY26's first interim dividend of Rs 6.0 per share
  • M&A UBS India Wealth Management Business Acquisition · Integrated · Consideration ₹[object Object] (cash) · AUM ₹26,000 Cr

    To integrate UBS AG's India wealth management business into 360 ONE Wealth, along with their highly capable bankers and other team members, and a trusted legacy of excellence. This business includes distribution and broking, Discretionary and Non-Discretionary Portfolio Management Services and lending services, for its wealth management clients.

    Will have a similar cost to income as our current Wealth business.

    We will also integrate UBS AG's India wealth management business into 360 ONE Wealth, along with their highly capable bankers and other team members, and a trusted legacy of excellence. The business includes distribution and broking, Discretionary and Non-Discretionary Portfolio Management Services and lending services, for its wealth management clients. This business transfer adds approx. 26K crs of active AUM and recurring non-lending revenues of Rs 45-50 crs and will have a similar cost to income as our current Wealth business. The net consideration being paid for this business transfer is Rs 307 crs
  • M&A B&K Securities Acquisition · Pending regulatory

    To grow presence across broking, equity capital markets, merchant banking, and corporate treasury space while fortifying lead position in wealth and alternate asset management.

    Full year PAT to Rs 102 crs.

    As an update on B&K, the regulatory approvals are underway, and we hope to complete the transaction within this quarter. Specifically, the B&K business performance remains strong over the last quarter, with operating revenues at Rs 65-70 crs and continued PAT of approx. 25 crs, bringing the full year PAT to Rs 102 crs.
  • M&A ET Money Acquisition · Integrated · AUM ₹33,000 Cr

    To expand offerings and client base.

    Q4 loss of ~Rs 1 Cr. Full year revenue run rate ~Rs 50-52 Crs, profit run rate ~Rs 10-12 Crs.

    We are also happy to announce that all requisite approvals regarding the ET money acquisition were received in Q4 and the firm, formally, became part of 360 ONE WAM. ... On the AUM side, ~Rs33,000 Crs of AUM has been added on the TBR AUM side. And on the ARR side, ~1,750 Crs has come in... The revenues from ET Money, about eight weeks revenue and cost, have gotten captured for this particular quarter. So, the revenue is ~Rs 6 Crs, and there is a Rs 1 Cr loss for this two-month period. ... Revenue will largely be on track. It'll be ~Rs 50 to 52 Crs. ... The PBT broadly would be in the region of Rs 20-25 Crs. PAT would be in the region of Rs 10 to 15 Crs, which is largely resulting in that value of ~Rs 300 Crs.

Guidance & targets

AUM Growth

  • Annual AUM Growth AUM Growth · annually · High confidence 20-25%
    But at a very philosophical level, we would like to add around about 12 to 15% AUM every year. Add around about 8 to 10% on mark-to-market. So effectively grow the AUM by around about 20-25% resulting in a 16 to 18% growth in revenues and a consequent 20-25% growth in profits. That's our headline mantra. We want to kind of be able to grow our AUM by 20-25%, resulting in revenue growth of 15 to 20%, and back again PAT growth of 20 to 25%.

    — Mr. Karan Bhagat - MD & CEO, 360 ONE WAM

Revenue Growth

  • Annual Revenue Growth Revenue Growth · annually · High confidence 15-20%
    But at a very philosophical level, we would like to add around about 12 to 15% AUM every year. Add around about 8 to 10% on mark-to-market. So effectively grow the AUM by around about 20-25% resulting in a 16 to 18% growth in revenues and a consequent 20-25% growth in profits. That's our headline mantra. We want to kind of be able to grow our AUM by 20-25%, resulting in revenue growth of 15 to 20%, and back again PAT growth of 20 to 25%.

    — Mr. Karan Bhagat - MD & CEO, 360 ONE WAM

Profitability

  • Annual PAT Growth Profitability · annually · High confidence 20-25%
    But at a very philosophical level, we would like to add around about 12 to 15% AUM every year. Add around about 8 to 10% on mark-to-market. So effectively grow the AUM by around about 20-25% resulting in a 16 to 18% growth in revenues and a consequent 20-25% growth in profits. That's our headline mantra. We want to kind of be able to grow our AUM by 20-25%, resulting in revenue growth of 15 to 20%, and back again PAT growth of 20 to 25%.

    — Mr. Karan Bhagat - MD & CEO, 360 ONE WAM

  • ROE Profitability · going forward · Medium confidence around 20%
    But at the very highest level, you're right, we need to ensure that we are able to do substantial justice to the incremental capital to maintain our ROE around the 20% mark.

    — Mr. Karan Bhagat - MD & CEO, 360 ONE WAM

Long-term PAT

  • PAT Target Long-term PAT · 3-5 years · Medium confidence Rs 2,100-2,200 Crs

    From Rs 1,000 Crs today

    Now ideally speaking, we have to build the right canvas excel model to move this Rs 1,000 Crs of PAT to around about Rs 2,100-2,200 Crs, let's say, 2.2 times in a reasonable time period.

    — Mr. Karan Bhagat - MD & CEO, 360 ONE WAM

Long-term Revenue

  • Revenue Target Long-term Revenue · 3-5 years · Medium confidence Rs 5,000-5,500 Crs

    From Rs 2,700-2,750 Crs today

    And when I look at that revenue mix and to get to that profit number, you obviously need to do Rs 5,000-5,500 Crs of revenue.

    — Mr. Karan Bhagat - MD & CEO, 360 ONE WAM

Long-term ARR AUM

  • ARR AUM Target Long-term ARR AUM · 3-5 years · Medium confidence Rs 500,000-550,000 Crs

    From Rs 260,000-270,000 Crs today

    We need to grow our current Rs 260,000-270,000 Crs of ARR AUM to ~5,00,000-5,50,000 Crs in that time period to get there.

    — Mr. Karan Bhagat - MD & CEO, 360 ONE WAM

Long-term ARR Revenue Mix

  • ARR Revenue as % of Total Revenue Long-term ARR Revenue Mix · 3-5 years · Medium confidence 75-80%

    From 70% today

    The first thing which comes to my mind is, you would need at least 75 to 80% of that number to come in through ARR. And I would love to maintain that mix of at least 75% coming from ARR revenues.

    — Mr. Karan Bhagat - MD & CEO, 360 ONE WAM

Long-term ARR Retention

  • ARR Retention Long-term ARR Retention · 3-5 years · Medium confidence 65-70 bps
    If you were to if you were to convert the Rs 5,000 Crs of revenue into 75 or 80%, which is Rs 3,750 to 4,000 Crs, and assuming you are in a broad basis of 65-70 odd basis points of ARR retention, we need to grow our

    — Mr. Karan Bhagat - MD & CEO, 360 ONE WAM

ESOP Cost

  • ESOP Cost Levels ESOP Cost · next two years, then year after · High confidence similar levels, then 10% lower
    For the next two years, it's fair to say the ESOP cost will be at similar levels, not phenomenally different, maybe 10% lower. But and then the year after that, a further 10% lower, simply because there's a certain quantum of affronting of the ESOP costs.

    — Mr. Karan Bhagat - MD & CEO, 360 ONE WAM

Market context

  • Global Business Drag Global Business · going forward · High confidence goes away

    Previously Rs 50 Crs → goes away

    Yeah, that goes away. Yes, that's right.

    — Mr. Karan Bhagat - MD & CEO, 360 ONE WAM

What to watch in Q1 FY26

B&K Securities acquisition closure

within this quarter
Current Regulatory approvals underway
Target Transaction completed

Why it matters

Completion of this acquisition is key to expanding the company's capital markets segment and realizing synergies.

As an update on B&K, the regulatory approvals are underway, and we hope to complete the transaction within this quarter.

Risks & concerns

  • ROE dilution due to capital raise

    medium

    The QIP and UBS capital infusion will lead to an initial dip in ROE, but management aims to maintain it around 20%.

    Analyst acknowledged

  • Talent attrition impacting AUM flows

    medium

    Loss of 8-10 senior RMs in the last 4-5 months led to a net outflow of Rs 2,300-2,400 Crs in ARR AUM during Q4.

    Management acknowledged

  • Market volatility impacting transaction activity

    low

    Q4 saw a patch of 15 days to a month with lower pure transaction activity, though offset by fixed income and real estate.

    Management acknowledged

Q&A highlights

6 direct
Revenue opportunity from UBS collaboration (excluding AUM transfer) Partial
I wouldn't say the revenue contribution has a one-on-one match with the Rs 2,000 Crs we are raising. There are a lot of potential synergies on the revenue side, some of which I described. But there are 3-4 large synergies on the revenue side.

Analyst sought quantification of revenue synergies from the UBS partnership beyond the AUM transfer, but management indicated it's too early to provide specific numbers.

Asked by Mr. Prayesh Jain

Use of capital from the warrant raise (Rs 2,000 Crs) Direct
Needless to say, out of the Rs 2,000 odd Crs, although Rs 300 Crs won't go as a part of that Rs 2,000 Crs, but obviously, I think, on an overall pool basis, Rs 300-350 Crs will get utilized for that. We have acquired BNK Capital. We'll end up using Rs 250-300 Crs of incremental margin there. The NBFC book is continuing to see some good growth. We will add around about Rs 800-900 Crs there out of Rs 2,000 Crs. And the last Rs 400-500 Crs would largely get used potentially as an overall addition to the Alternates business

Management provided a clear breakdown of how the capital raised through warrants will be deployed across strategic initiatives like UBS, B&K, NBFC growth, and Alternates.

Asked by Mr. Prayesh Jain

Low yield and cost-to-income for transferred UBS AUM Direct
The realization obviously is around about Rs 70-75 Crs of revenue, slightly higher. The realization we have considered is Rs 50-55 Crs is because there are certain elements of revenue which would not accrue on our platform. And, from a transfer of business perspective, it is only relevant parts of the business which are transferred to us... The PBT broadly would be in the region of Rs 20-25 Crs. PAT would be in the region of Rs 10 to 15 Crs, which is largely resulting in that value of ~Rs 300 Crs.

Analyst questioned the low revenue yield and similar cost-to-income for the acquired UBS AUM. Management clarified the actual revenue accrual and profitability, justifying the acquisition cost.

Asked by Mr. Prayesh Jain

Muted Q4 Wealth Management net flows Direct
We lost around about 8 to 10 people across the country over the last 4-5 months in terms of senior folks. And that led to approximately a net outflow of around about Rs 2,300-2,400 Crs across the system over the last 4-5 months on the ARR AUM side. To a certain extent, the net flows are slightly dampened for the Rs 2,500 Crs of net outflows from the system.

Management attributed the muted Q4 net flows in Wealth Management to attrition of senior relationship managers and a temporary dip in market activity.

Asked by Mr. Mohit Mangal

ROE trajectory post capital raise Direct
Well, that's always a challenge. But the opportunities are large... it may lead to maybe an overlap of 6-9 months of higher capital. By the time we end up using the current capital raise, we'll have the UBS money coming in, subject to warrant conversion. There are lots of opportunities out there. We'll have to keep our eyes and ears open. UBS added a lot of strategic value to the business. And therefore, we felt comfortable taking in that capital and building out that optionality. But at the very highest level, you're right, we need to ensure that we are able to do substantial justice to the incremental capital to maintain our ROE around the 20% mark.

Analyst raised concerns about potential ROE dilution due to recent capital raises. Management acknowledged an initial dip but committed to maintaining ROE around the 20% mark by leveraging new opportunities.

Asked by Mr. Nidesh Jain

Discretionary PMS yield and carry impact Partial
I think you're right. The discretionary PMS on these separately managed accounts would go back to the same numbers. But having said that, there are at least 3-4 mandates in which we get a profit share. So, the best is to look at the annualized yield as opposed to look at the quarterly yield. It's not as if it will disappear next year, but it will disappear next quarter. ... Around the same yield will be reported next year also.

Analyst questioned the high Q4 PMS retention due to carry. Management confirmed the carry impact and stated that while quarterly yields might fluctuate, the annualized yield is expected to remain similar next year.

Asked by Mr. Sanketh Godha

Talent flow dynamics and attrition Direct
The good news is you can't be a hunting ground for talent till you don't have good talent. And the other thing is the fact that, hopefully while we are a hunting ground for good talent, we should hopefully continue to remain a platform which continues to attract good talent. As long as the second one is good to go, a little bit of churn would happen. Having said that, overall, the way to look at talent is we've lost a few people over the last 10 to 12 months, and as long as it's within a range, we're fairly comfortable.

Analyst asked about 360 ONE becoming a 'hunting ground' for competitors. Management acknowledged some attrition but expressed confidence in their ability to attract and retain talent and consolidate their position.

Asked by Mr. Aejas Lakhani

Long-term vision for revenue, PAT, and AUM growth Direct
Now ideally speaking, we have to build the right canvas excel model to move this Rs 1,000 Crs of PAT to around about Rs 2,100-2,200 Crs, let's say, 2.2 times in a reasonable time period. ... you obviously need to do Rs 5,000-5,500 Crs of revenue. ... we need to grow our current Rs 260,000-270,000 Crs of ARR AUM to ~5,00,000-5,50,000 Crs in that time period to get there.

Management outlined an ambitious long-term vision for significantly increasing PAT, total revenue, and ARR AUM over the next 3-5 years, emphasizing continued focus on the recurring revenue model.

Asked by Mr. Aejas Lakhani

2 min read 6 chapters

Detailed narrative

Strong Financial Performance in FY25

360 ONE reported robust financial results for FY25, with total revenues increasing by 35.0% YoY to Rs 2,652 crores. The company achieved its highest-ever annual PAT of Rs 1,015 crores, marking a 26.6% YoY growth. This performance was supported by an improved Cost-to-Income ratio, which decreased to 45.9% from 48.7% in FY24, indicating enhanced operational efficiency.

Robust AUM Growth and Net Flows

The company's focus on recurring revenue (ARR) assets yielded significant growth, with total ARR AUM increasing by 23% YoY to Rs 2,46,828 crores. This growth was primarily driven by strong net flows, which amounted to Rs 25,974 crores during the year, a substantial increase from Rs 16,136 crores in FY24. Wealth ARR net flows alone grew by 42% YoY to Rs 22,334 crores, demonstrating continued client acquisition and asset accumulation.

Strategic Collaborations and Acquisitions

360 ONE executed several key strategic initiatives, including an exclusive collaboration with UBS AG. This partnership involves UBS AG subscribing to warrants representing a 4.95% stake and the integration of UBS India's wealth management business, adding approximately 26,000 crores of AUM and Rs 45-50 crores in recurring non-lending revenues for a consideration of Rs 307 crores. Additionally, the acquisition of ET Money received all requisite approvals in Q4, contributing ~Rs 33,000 crores to TBR AUM and ~Rs 1,750 crores to ARR AUM. The acquisition of B&K Securities is also progressing, with regulatory approvals underway.

Capital Allocation for Growth Initiatives

The company outlined its plan for deploying the Rs 2,000 crores raised through warrants. Approximately Rs 300-350 crores will be used for the UBS business transfer, Rs 250-300 crores for BNK Capital (B&K Securities), Rs 800-900 crores for growing the NBFC book, and Rs 400-500 crores for the Alternates business. This strategic allocation aims to fuel growth across various business segments and enhance long-term value.

Outlook on AUM, Revenue, and Profitability

Management provided an optimistic outlook, targeting annual AUM growth of 20-25%, annual revenue growth of 15-20%, and annual PAT growth of 20-25%. The long-term vision includes achieving a PAT of Rs 2,100-2,200 crores from the current Rs 1,000 crores, requiring Rs 5,000-5,500 crores in revenue, with 75-80% coming from ARR. This implies growing ARR AUM from Rs 260,000-270,000 crores to Rs 500,000-550,000 crores within 3-5 years.

Talent Dynamics and Operational Focus

While acknowledging some talent attrition, with 8-10 senior RMs leaving in the last 4-5 months leading to a Rs 2,300-2,400 crores net outflow in ARR AUM, management expressed confidence in attracting new talent and maintaining a strong team. The mid-market segment is now shifting to execution, with AUM inflows expected to follow, supported by 45-50 RMs. Global expansion through the UBS collaboration is anticipated to be onstream by Q3, following regulatory approvals.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Financial Services earnings calls