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Motilal Oswal Report
360 One Wam Ltd.’s total revenue grew 6% YoY to Rs 4.4 billion in Q3 FY24, in line with our estimate, mainly driven by a 9% QoQ jump in annual recurring revenue income (in line) to Rs 3.4 billion. However, total business return income fell 13% QoQ to Rs 1 billion.
Total opex rose 24% YoY to ~Rs 2.3 billion, which was 6% higher than our estimate. Increased employee costs (6% above estimate) led to higher opex in Q3 FY24.
Employee costs jumped 30% YoY. Total ESOP cost came in at Rs 120 million (up 109% YoY and up 33% QoQ). During the quarter, 360 One’s cost-to income ratio increased ~760 basis points YoY to 52.5% (versus our estimate of 48%).
Profit before tax for the quarter was broadly in line at ~Rs 2.4 billion. Profit after tax grew 13% YoY to Rs 1.9 billion in Q3 FY24.
For nine months-FY24, revenue/PAT grew 9%/12% YoY to Rs 12.7 billion/Rs 5.7 billion.
Total AUM rose 32% YoY to Rs 4.54 trillion, led by a continued focus on scaling up the ARR assets. ARR AUM was up 33% YoY to Rs 2.21 trillion.
The board has approved an interim dividend of Rs 4 per share.
We have revised down our earnings per share estimates by 3.4%/1% for FY25/FY26 to factor in higher cost on account of additional headcount (including senior level hires) in the ultra high networth individual segment and cost relating to new business initiatives (mid-market segment and global platform).
We retain our 'Buy' rating on the stock with a one-year target price of Rs 770 (based on 25 times March-26E earnings per share).
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