Buy 360ONE WAM; target of Rs 520: Motilal Oswal

Motilal Oswal's research report on 360ONE WAM

4QFY23 PAT stood at INR1.6b, lower than our estimate of INR2.0b owing to negative 78m other income v/s our expectation of positive INR289m. Opex declined 21% YoY to INR1.85b, which was 3% lower than our estimate. Employee costs declined 26% YoY. The cost-to-income ratio fell 849bp YoY to 47.1% (est. 44.6%). Total AUM rose 4.8% YoY to INR2.74t, with continued focus on scaling up ARR assets. ARR AUM grew 16% YoY to INR1.67t. ARR net flows stood at INR59b for the quarter, while total net flows came in at INR70b. FY23 revenue/PAT grew 12%/15% YoY to INR15.7b/INR6.7b. The board has approved an interim dividend of INR4 per share (first interim dividend of FY24).

Outlook

We have cut our EPS estimates largely to factor in lower retentions on 360ONE Plus (erstwhile IIFL One) and lower other income for FY24/FY25. We retain our BUY rating with a one-year TP of INR520 (based on 21x Mar’25E EPS).