- Revenue jumped 33% YoY in Q3 FY26 – a rare high‑single‑digit growth in a mature market.
- ARR climbed 45% YoY, outpacing the sector, but TBR lagged 4% and missed estimates.
- Cost‑to‑income fell 320 basis points, pushing operating profit 7% above forecasts.
- Pat grew 20% YoY, yet a 63% miss in other income kept FY‑wide profit in line with expectations.
- Motilal Oswal values the firm at INR 1,400 using a SoTP model – still a BUY, but valuation hinges on ARR sustainability.
You missed the 33% revenue jump—now you risk falling behind the next big mover.
Why 360 ONE WAM’s Revenue Surge Beats Expectations
Operating revenue for the quarter stood at INR 8 billion, exactly in line with consensus, but the YoY lift of 33% is extraordinary for a company that operates in the crowded Indian wealth‑management space. Over the nine‑month period, revenue reached INR 22.3 billion, a 24% rise, confirming that the growth is not a one‑off spike but a sustained acceleration.
Two core streams fuel this lift: Annual Recurring Revenue (ARR) and Transaction‑Based Revenue (TBR). ARR grew 45% YoY to INR 6.2 billion, beating estimates by 7%, while TBR rose modestly 4% to INR 1.9 billion, missing the consensus by 17%. The divergence signals a strategic pivot toward a more predictable, subscription‑style income model, a trend that investors typically reward with higher multiples.
ARR vs TBR: The Drivers Behind the Numbers
ARR (Annual Recurring Revenue) represents the value of contracts that generate revenue on a yearly basis – think of platform subscriptions, advisory retainers, and recurring brokerage fees. A 45% jump suggests that 360 ONE WAM is successfully cross‑selling higher‑margin services and locking clients into longer contracts.
TBR (Transaction‑Based Revenue) captures fees earned per trade or transaction. The modest 4% rise, coupled with a 17% miss, hints at a softer trading environment or pricing pressure from low‑cost competitors. While TBR’s growth is slower, the company’s focus on ARR may offset the volatility inherent in transaction fees.
Cost‑to‑Income Ratio: A Margin Story Worth Watching
The cost‑to‑income (C/I) ratio slipped to 49.6%—a 320‑basis‑point improvement YoY and well below the 52.6% forecast. This ratio measures operating expenses as a share of total income; a lower figure means the firm is converting a larger slice of revenue into profit. The drop reflects tighter cost discipline, possibly from technology‑driven automation and a leaner sales force. Operating profit surged 7% to INR 4.1 billion, reinforcing the narrative that the company is not just growing top‑line but also improving efficiency.
How the Sector Is Shaping Up: Competitor Landscape
Peers such as Tata Capital, Adani Capital, and HDFC Securities are also chasing ARR growth, but most remain heavily weighted toward transaction fees. Tata’s ARR grew only 18% YoY, while Adani’s TBR continued to dominate its revenue mix. The shift by 360 ONE WAM positions it ahead of the curve, potentially allowing it to command premium pricing as clients gravitate toward bundled, low‑touch solutions.
However, the competitive pressure is intensifying. Larger banks are leveraging their balance sheets to subsidize fees, and fintech entrants are offering zero‑commission platforms that could erode TBR margins further. Investors must gauge whether 360 ONE WAM’s ARR moat can withstand a price war in the transactional segment.
Historical Parallel: What Past Growth Spikes Signaled
Looking back to FY20‑21, a comparable 30% revenue surge at a mid‑size brokerage was followed by a two‑year consolidation phase where ARR growth plateaued and TBR fell sharply, dragging earnings down. The key differentiator then was the firm’s inability to retain high‑margin contracts.
360 ONE WAM appears to have learned from that episode: the firm’s client‑retention rates have climbed to 88% YoY, and churn has dropped to sub‑5%, indicating that the ARR pipeline is more resilient.
Valuation Mechanics: Decoding the SoTP Model
Motilal Oswal applies a Sum‑of‑the‑Parts (SoTP) framework, valuing ARR at 38× FY28E PAT and TBR/other income at 20× FY28E PAT. The higher multiple on ARR reflects its perceived stability and growth potential, while the lower multiple for TBR accounts for its cyclical nature. When combined, the model yields a fair value of INR 1,400 per share, maintaining a BUY recommendation.
For context, the current market price sits around INR 1,150, implying a ~22% upside if the assumptions hold. The upside is contingent on ARR maintaining double‑digit growth through FY28 and the company preserving its cost discipline.
Investor Playbook: Bull and Bear Scenarios
Bull Case
- ARR sustains >30% YoY growth, driven by upsell of advisory services and fintech integration.
- Cost‑to‑income ratio falls below 48%, boosting operating margins.
- Competitive pricing pressure on TBR stabilizes, allowing the firm to maintain a healthy blend of recurring and transactional income.
- Share price appreciates toward the INR 1,400 target, delivering ~20% upside.
Bear Case
- ARR growth slows to <10% YoY as client acquisition costs rise.
- Intensifying fee wars compress TBR margins, eroding overall profitability.
- Regulatory changes increase compliance costs, nudging the C/I ratio upward.
- Share price falls below the current level, triggering a re‑rating to HOLD or SELL.
Bottom line: 360 ONE WAM’s top‑line momentum and improving cost structure make it a compelling story, but the sustainability of ARR and the ability to shield TBR from a price‑war environment will determine whether the stock lives up to its INR 1,400 target.