360 ONE WAM reported a 4.4% decline in quarterly net profit to Rs 302 crore, driven largely by non-recurring paper losses on investments. Despite this, core operating profit rose 20% to Rs 434 crore, supported by record inflows into recurring revenue assets. The company is now focusing on improving cost efficiency and preparing for a new capital markets platform launch in April.
360 ONE WAM reported a net profit of Rs 302 crore for the second quarter, marking a 4.4% decline compared to the same period last year. This dip was primarily caused by mark-to-market losses of Rs 110-120 crore. In simple terms, these are paper losses on investments held by the firm, where the current market value was lower than the purchase price. Since these losses are linked to market valuations of existing investments and not from the firm's actual business operations, they do not reflect the core performance of the wealth management division.
Core Business Shows Growth
When looking beyond these paper losses, the core business showed strong momentum. The company’s core operating profit grew by 20% year-on-year to Rs 434 crore. This performance was driven by record net inflows of Rs 12,482 crore into its Annual Recurring Revenue assets. These assets provide a steady stream of income for the company, making its revenue model more predictable. Total assets in this category grew nearly 20% to reach Rs 3.53 lakh crore, now accounting for 60% of the firm's total Assets Under Management. Client retention also remained high, suggesting that the core wealth management business continues to be stable.
Operational Efficiency and Future Plans
The management is now sharpening its focus on operational efficiency. The cost-to-operating-income ratio, which indicates how much it costs to generate income, currently stands at 51.5%. The company has set a target to bring this metric down to the 46-47% range within the next 18 months, which could help support profit margins. While income from brokerage and deal-based activities softened by 9.1% due to fluctuations in market deal activity, the firm is successfully shifting its revenue mix away from these volatile sources toward more stable, recurring fees.
Looking ahead, 360 ONE WAM is preparing to launch a full-scale capital markets platform by April. This initiative is expected to integrate investment banking services and provide a new growth lever for the next financial year. While the current Return on Equity of 16.9% is below the company's long-term target of 20%, the transition toward recurring revenue streams remains a central part of the company's long-term strategy. The next important monitorables for investors will include the cost-control progress, client retention levels, and the successful rollout of the new capital markets business.