Target: ₹1,250
CMP: ₹1,039.50
We attended an analyst call hosted by the management team of 360 One WAM. The management outlined the strategic rationale behind the B&K acquisition and new strategic initiatives. The following are the key takeaways from the meet:
B&K acquisition is a strategic fit for 360 ONE as it will enhance its business in multiple ways — it will provide equity advisory to existing clients; corporate advisory of B&K will benefit from the product portfolio of 360 ONE; and the corporate relationships of 360 ONE will help scale up the IB business. The deal is likely to be EPS-accretive by 3-5 per cent.
The company expects a revenue CAGR of 15-25 per cent in B&K business over the next three-five years, driven by incremental business from existing customers and new customer additions, with its inherent need for a strong equity advisory franchise.
With the recent market corrections, the company expects to gain market share given its strong product portfolio and customers sitting on 10-20 per cent cash for deployment in equity markets. The current flows are more toward non-equity assets, though a change in the existing AUM mix toward debt seems to be a limited possibility.
360 ONE maintains a strong position in the industry, reflected by robust flows and consistent performance. Diversification across client segments (mass affluent) and geography (lower-tier cities) is gaining traction, and its global platform has also seen green shoots.
We have cut our estimates by 2 per cent/4 per cent for FY26/FY27 to factor in the MTM hit along with lower assumptions on growth in inflows. We have not yet built in revenues/costs/dilution for the B&K acquisition. We retain our Buy rating with a one-year TP of ₹1,250, premised on 34x FY27E EPS.