360ONE Q2 FY27 Earnings Call: Record ARR Net Flows of Rs. 12,482 Cr, MTM Drag Weighs on PAT

Record ARR Flows Offset by MTM Drag; PAT Down YoY

• Revenue from operations of Rs.896 cr — up 17.5% YoY in Q2 FY 2026-2027; ARR revenue contributed 79% of operating revenues at Rs.706 cr, up 27.5% YoY.
• Operating PBT grew 19.7% YoY to Rs.434 cr — but PAT was Rs.302 cr in Q2 FY 2026-2027 vs Rs.316 cr in Q2 FY 2025-2026.
• ~Rs.110-120 cr mark-to-market hit — fair value change on NSC investments impacted the Q2 FY 2026-2027 P&L, largely through funds.
• ARR retention improved to 79 bps — up from 74 bps in Q1 FY 2026-2027; blended overall relationship retention stands at 65 to 72-73 bps.
• Tangible ROE of 16.9% — Board approved a second interim dividend of Rs.7.5 per share.

Rs.12,482 Cr ARR Net Flows; AUM Up 31% YoY

• Total AUM reached ~Rs.9 lakh cr — up 31% YoY; ARR AUM stood at Rs.3,53,000 cr, up 19.7% YoY in Q2 FY 2026-2027.
• ARR net flows of Rs.12,482 cr — up from Rs.10,815 cr in Q1 FY 2026-2027; H1 FY 2026-2027 flow mix shifted to 50% wallet-share enhancement / 50% new mandates vs historical ~65-70% new.
• Industry tailwinds cited by management — record industry SIP flows of Rs.32,500 cr in September (Q2 FY 2026-2027) and ~70 companies raising Rs.90,500 cr via IPOs in the quarter; ~60 IPOs drove client flows.
• Management cited industry UHNI segment growth of 13-15% (period unspecified) as a key long-term tailwind.
• Private market activity revived in Q2 FY 2026-2027 — 4 transactions from unlisted business dilutions.

Client Base Doubles; Premiumization Trend Intact

• Wealth ARR AUM grew 24.3% YoY to Rs.2,52,627 cr — Wealth ARR revenue grew 40.5% YoY to Rs.503 cr in Q2 FY 2026-2027.
• New families grew from ~1,800-1,900 (5 years back) to ~4,200 — driven by UHNI brand and platform expansion; client base grew from ~1,900 (FY 2021-2022) to 4,100.
• 5-year+ vintage clients contribute 65% of AUM — client attrition was <0.5% and AUM attrition <0.25% in Q1 FY 2026-2027; net flow split was 1/3 new to 2/3 existing clients in Q2 FY 2026-2027.
• Yatin Shah expects premiumization to continue over the next 5-10 years — clients scaling from 25-50 crore to 250-300 crore ranges, alongside new client addition.
• HNI AUM rose to ~Rs.8,500-9,000 cr — ~Rs.500 cr organic flows in Q2 FY 2026-2027 plus ~2,000 relationships transferred from Ultra HNI; HNI manages Rs.8,000 cr for 1,500 clients with break-even on direct costs expected soon (period unspecified).
• ET Money ARR AUM reached ~Rs.3,300-3,400 cr by Q2 FY 2026-2027.

Strong Alternates Pipeline; Fund Redemption Overhang Flagged

• Alternates AIF AUM grew 27.9% YoY to Rs.58,139 cr — Q2 FY 2026-2027 gross inflows of ~Rs.4,800-4,900 cr (net ~Rs.2,500 cr); management reported a strong pipeline and a first European institutional mandate.
• Fund P1A redemption overhang — ~Rs.3,000-3,500 cr of current value scheduled for redemption over Q3 FY 2026-2027 to Q4 FY 2027-2028; management flagged the need for new fund launches to offset this, expecting high reinvestment rates given the fund's 36-37% CAGR over 5 years.
• Asset management net flows impacted by institutional redemptions in Q1 and Q2 FY 2026-2027; management expects the headwind to clear and guided meeting FY 2026-2027 targets, citing 2 new institutional mandates won in H2 Q2 FY 2026-2027.
• B&K equity brokerage synergies up from ~Rs.4.5-5 cr/month to ~Rs.8-9 cr/month in Q2 FY 2026-2027; management guided potential to reach ~Rs.15-20 cr/month from the existing client base.
• Management guided appointment for ~8-10 issues — full-fledged capital markets platform expected by Q1 FY 2027-2028 (Q2 CY 2027).
• Anshuman Maheshwary guided measured MF growth for FY 2026-2027 and FY 2027-2028 — leveraging sustained performance over FY 2021-2022 to FY 2025-2026 and SIP introduction, while pursuing a differentiated, non-retail strategy.

Cost-to-Income Path to ~48% by Q4 FY27

• ~$300-325 mn in UBS flows exchanged in Q2 FY 2026-2027 — management targets $600-650 mn for full FY 2026-2027 and expects to reach $600-700 mn by year-end.
• Cost-to-operating-income improved 100-150 bps in Q2 FY 2026-2027 vs FY 2025-2026; management guided 1-1.5% overall improvement for full FY 2026-2027.
• Cost-to-income ratio target of ~48% by Q4 FY 2026-2027 — with further improvement to 46-47% over the next 12-18 months.
• 3 new leaders hired in Q2 FY 2026-2027 — no structural change to cost ratios expected; potential increases of 100-200 bps flagged for significant build-out phases (period unspecified).
• Ashish Agarwal (former Jefferies India head) joins senior leadership — first 6-8 months focused on integration, with build-out over the next 3-4 years.
• MF AMC yield decline attributed to a one-time admin fee accrual — per Yatin Shah, underlying yields described as stable.

Path to ~20% Tangible ROE Without New Capital

• Management aims to double profits over the next 3-3.5 years from Q2 FY 2026-2027 — and, without raising additional capital, reach a ~20% tangible ROE; the 25% figure remains a longer-term aspiration (period unspecified).
• Tangible net worth of ~Rs.7,400 cr as of Q2 FY 2026-2027 — expected additions of ~Rs.1,600 cr from the UBS warrant conversion in February 2027 (Q4 FY 2026-2027) and ~Rs.1,000-1,200 cr of annual PAT (post-dividend) over the next 2-3 years, lifting tangible net worth to ~Rs.10,000-12,000 cr over that horizon.
• Segment ROE structure (period unspecified) — standalone wealth can show ~45-60% ROE (complemented by NBFC lending), pure listed business ~35-40%, and alternates requires 3-4% of AUM as sponsor capital; management said all put together leaves it comfortable with an 18-20% consolidated tangible ROE.
• TBR guided at late single/early double digit growth — Q2 FY 2026-2027 TBR was soft due to a structural shift from upfront fees to brokerage; at a future revenue run-rate of ~Rs.5,000-5,500 cr (period unspecified), management sees TBR in the ~Rs.800-1,000 cr zip code vs current run-rate of ~Rs.1,100 cr quarterly revenue with TBR at ~Rs.200-225 cr.
• ~$300 mn in international flows guided — ~$200-250 mn from existing Ultra HNI clients, with a guided retention yield of ~40-50 bps.
• ~60% of Q2 FY 2026-2027 carry recognized by the wealth segment came from third-party products; management noted accounting is conservative and mirrors the own-fund process.
• FY 2026-2027 priorities guided by management — adding wealth clients, scaling the 361 Capital ECM pipeline, expanding alternates distribution, and maintaining cost discipline; proprietary "Compass" AI layer deployed across wealth, asset management, and enterprise functions.