360 ONE WAM: Q1FY25 Earnings Call Highlights

Strong growth momentum and a clear strategic vision for future expansion. 360 ONE well-positioned to benefit from favorable market conditions. Investors can expect returns in the long term

Sep 22, 2024

360.one | NSE: 360ONE

Positive Performance

360 ONE WAM reported strong Q1 FY25 results with robust revenue growth, impressive profit margins, and a high tangible RoE.

Key Growth Drivers:

Strong Wealth Management Performance: Net flows in wealth management were robust, driven by strong advisory performance and success of the 360 ONE Plus offering.
Growth in Asset Management: Despite planned outflows from pre-IPO flagship funds, growth in the asset management business remained positive, fueled by strong gross flows.
Acquisition of ET MONEY: Acquisition of ET MONEY, a leading fintech, will accelerate monetization of its client base and position 360 ONE as a leader in WealthTech for the growing 10L to 1Cr segment.

Focus Areas and Opportunities

Expansion into Mid-Market Segment: The launch of the mid-market segment, targeting clients with Rs 10 Crs+ ARR AUM, is expected to start monetizing in August 2024.
Global Expansion: The global business is poised for takeoff in H2 of FY25, with a strong pipeline of client discussions.
Leveraging Unlisted Market: The budget's tax benefits for unlisted investments will drive growth in the unlisted market, and 360 ONE is well-positioned to capitalize on this opportunity.
Expanding into Fixed Income: The budget's reduced long-term tax on listed bonds will spur growth in the fixed income market, creating new opportunities for 360 ONE.
Investing in Distribution: Increased investment in distribution, particularly on the mutual fund side, is expected to yield positive results.

Outlook

Cost to Income Ratio: The cost to income ratio is expected to stabilize at 45-46% for the year, with a long-term target of 43-45%.
Net Flows: The company is confident in achieving net flows of Rs 25,000 to Rs 35,000 Crs for the year.
Growth in Alternate Business: Strong performance of pre-IPO and other funds, along with the budget's tax benefits, will fuel growth in the alternate business.
Dividend: 360 ONE WAM continues to maintain a dividend payout ratio of 70-80%, with a slight reduction this quarter due to investments in the alternate business.

Overall

360 ONE WAM’s Q1 FY25 results demonstrate strong growth momentum and a clear strategic vision for future expansion. The company is well-positioned to benefit from the favorable market conditions and its robust business model. Investors can expect continued growth and attractive returns in the long term

360 ONE WAM Limited (formerly IIFL Wealth Management Limited) Q1 FY25 Earnings Call FAQ

Q1: What is the outlook for the Indian Wealth & Asset Management sector?

A1: India's Wealth & Asset Management sector is poised for structural growth in the coming years. This growth will be driven by robust GDP growth, capital market expansion, faster wealth creation outside traditional pockets, and overall low penetration in the sector.

Q2: How did 360 ONE WAM perform in Q1 FY25?

A2: 360 ONE WAM reported strong Q1 FY25 results. Key highlights include:

Total ARR AUM: Increased to Rs 2,21,287 Crs, up 34% YoY
Net Flows: Reached Rs 5,549 Crs, up 70% YoY
Revenue from Operations: Grew by 48% YoY to Rs 600 Crs
Profit After Tax (PAT): Increased by 34.2% to Rs 243 Crs, the highest ever quarterly PAT.

Q3: What are the key growth drivers for 360 ONE WAM?

A3: Key growth drivers include:

Strong performance in Wealth and Asset Management businesses
Continued expansion of the client base, particularly in the HNI and Ultra HNI segments
Growth in ARR (Annual Recurring Revenue) streams
New product launches and strategic acquisitions, such as ET Money.

Q4: What is 360 ONE WAM's strategy for the mid-market segment?

A4: 360 ONE WAM will officially launch its mid-market segment offering in August 2024. The company will leverage digital capabilities for a seamless client experience in this segment.

Q5: How will the acquisition of ET Money benefit 360 ONE WAM?

A5: This acquisition will accelerate 360 ONE WAM's reach into a new client segment (10 Lacs to 1 Crore). ET Money's established digital platform and advisory services offer significant synergies, particularly its "ET Money Genius" product.

Q6: How has the recent budget impacted 360 ONE WAM's business?

A6: The budget's tax changes, particularly the reduction of long-term capital gains tax on unlisted shares and listed bonds, have been positively received. These changes are expected to drive growth in both unlisted and fixed income markets.

Q7: What is 360 ONE WAM's approach to the unlisted shares market?

A7: While the company acknowledges the growth opportunities in the unlisted shares market, 360 ONE WAM maintains a conservative approach. It focuses on offerings where thorough due diligence has been conducted and where the company's blind pool funds are invested, ensuring a higher standard of prudence and risk management.

Q8: What is the company's outlook on cost-to-income ratio?

A8: 360 ONE WAM projects a cost-to-income ratio of 46-47% for the full fiscal year. The company aims to stabilize the ratio in the 44-46% range long-term.

Source: Link to Earning Call Transcripts

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