Buy 360ONE WAM; target of Rs 1300: Motilal Oswal

Motilal Oswal's research report on 360ONE WAM

360 One WAM (360ONE) reported operating revenue of INR6.5b (11% beat), reflecting growth of 14% YoY, largely due to a 41% YoY growth in recurring revenue. For FY25, revenue grew 32% YoY to INR24.5b. Total AUM rose 25% YoY to INR5.8t (in line), driven by a 23% YoY growth in ARR AUM to INR2.5t (in line) and 26% YoY growth in TBR AUM to INR3.3t (in line) during the quarter. Opex grew 11% YoY to ~INR3.3b (in-line), reflecting a cost-to-income ratio of 51.3% in 4QFY25 (vs. our estimate of 54.6%). Strong growth in revenue resulted in 7% beat in PAT at INR2.5b (+4% YoY). For FY25, PAT grew 27% YoY to ~INR10.2b. Management aims to achieve an annual ARR flow growth of 12-15% and an MTM growth of 8-10%, targeting an overall AUM growth of 20-25%. This is expected to translate into revenue growth of 15-20% and PAT growth of 20-25%.

Outlook

We assume full-scale utilization by FY29, and hence, the PAT is discounted to FY27 using a 13% discounting rate. We reiterate our BUY rating with a one-year TP of INR 1,300.