Buy 360 ONE WAM; target of Rs 910: ICICI Securities

ICICI Securities's research report on 360 ONE WAM

360 One WAM Ltd (IIFLW) managed to meet its FY24 guidance of INR 8bn PAT aided by higher transactional revenue and strong MTM gains throughout the year despite lower-than-expected recurring AUM flows, lower retention rates and higher-than-expected cost. Near term earnings outlook is expected to be strong basis: 1) better execution in Active ARR AUM flows aided by deepening wallet share of existing client segment beyond tier-1; 2) flows from new global/HNI segments; and 3) gradual restoration of cost to income towards mid-40s. With the stock price having rallied 29% over the last month, we downgrade the stock to ADD, from Buy. Key risks: Adverse MTM movements; decline in retention
rates and lower-than-expected flows.

Outlook

We raise our multiple from 25x to 28x, which yields a TP of ~INR 910. Our increase in multiple underlines the 23% potential earnings CAGR between FY24–26E, along with the structural opportunity of two key new wealth segments (global and HNI) that can exhibit higher growth run-off on AMC business.