Target: ₹1,250
CMP: ₹1,039.50
After participating in an analyst call held by the management team of 360 One WAM, we have gathered some key insights regarding the company’s recent activities and future outlook. Here are the main takeaways from the discussion:
The acquisition of B&K is seen as a strategic move by 360 ONE, with the potential to enhance its operations in various ways. It is expected to provide equity advisory services to existing clients, offer corporate advisory benefits to B&K, and help scale up the investment banking business through leveraging the existing corporate relationships of 360 ONE. The acquisition is projected to be EPS-accretive by 3-5 per cent.
The company anticipates a revenue compound annual growth rate (CAGR) of 15-25 per cent in the B&K business over the next three to five years. This growth is expected to be driven by increased business from current customers and the addition of new customers, highlighting the need for a strong equity advisory franchise.
In light of recent market corrections, 360 ONE foresees an opportunity to gain market share due to its strong product portfolio and the fact that its clients are holding onto significant cash reserves (10-20 per cent) for deployment in the equity markets. While current flows are more focused on non-equity assets, there is potential for a shift in the asset under management (AUM) mix towards debt, albeit to a limited extent.
360 ONE continues to maintain a strong position in the industry, as evidenced by robust flows and consistent performance. The company’s efforts to diversify across client segments, such as mass affluent, and geographies, including lower-tier cities, are gaining traction. Additionally, its global platform shows promising signs of growth.
We have revised our estimates slightly, lowering them by 2 per cent/4 per cent for FY26/FY27 to account for mark-to-market (MTM) impact and reduce growth assumptions for inflows. The financial impact of the B&K acquisition has not been factored into our projections yet. Despite these adjustments, we maintain a Buy rating on the stock with a one-year target price of ₹1,250, based on a price-to-earnings (P/E) multiple of 34x FY27E EPS.
