Welcome to 360 ONE WAM earnings call for Q3 FY '26. As a reminder, all participant lines will be on listen-only mode.

In case you wish to ask any questions or require assistance during the conference, kindly signal the host by tapping on the raised hand icon. Please note this conference is being recorded.

On the call today, we have with us Mr. Karan Bhagat, MD and CEO; Mr.

Yatin Shah, CEO of the Wealth Business; Mr. Anshuman Maheshwary, Chief Operating Officer; and Mr.

Sanjay Wadhwa, CFO. I now hand it over to Sanjay Wadhwa to take this conference ahead.

Thank you.

Thank you, Anil. A very good evening to all the participants.

Over the past year, Indian capital markets navigated a period of heightened volatility, shaped by evolving geopolitical dynamics and intermittent bouts of market consolidation. Encouragingly, even in such challenging market environment, the asset and wealth management ecosystem continued to demonstrate resilience, with healthy inflows driven by record levels of mutual fund SIP contributions, sustained activity in terms of monetization events, and a growing investor preference for alternate asset classes.

Coming to our business, our total ARR AUM increased to ₹3,17,906 crores, up 28% year-on-year, with Wealth ARR AUM at ₹2,18,957 crores and Asset Management ARR AUM at ₹98,949 crores. This growth was supported by strong net flows at ₹14,758 crores in Q3 FY '26 and ₹46,890 crores for 9 months FY '26.

We expect this momentum to sustain as our newly onboarded, high-quality teams continue to mature and achieve scale. In asset management, flows remain firmly on track, supported by healthy demand across funds spanning all asset classes.

The asset management business saw good mobilizations during the quarter, with over ₹2,000 crores raised in our real asset strategy, ₹2,500 crores of commitments in our private credit strategy, and ₹2,000 crores raised in our mid- and small-cap focused listed strategy. Our ARR revenue in the quarter grew 45.4% year-on-year at ₹619 crores, led by strong asset growth as well as improved retentions.

Our ARR revenue as a percentage of total revenue from operations stood at 77%. ARR retention remained strong at 81 basis points.

Incremental carry revenue during the quarter contributed about approximately 6 basis points during the quarter, and the retentions are expected to normalize in the quarters to come. Transaction and brokering revenues rose by 4.2% to ₹186 crores.

As stated in our previous quarter, revenue from institutional equities business of BNK, which is now being rebranded to 360 ONE Capital, is being classified as TBR. This business integration meaningfully enhances the sustainability of TBR revenues and is expected to moderate the periodic volatility experienced in the past, thereby improving the overall quality of predictability of earnings.

Total revenue increased by 21.8% to ₹826 crores, driven by strong growth in both wealth and asset verticals, partially offset by lower other income. Total costs were flat as compared to previous quarter at ₹399 crores, with corresponding cost-to-income ratio at 48.3%.

This is after factoring the estimated impact of the new labor code, which in our case was not very material at ₹7.5 crores. We expect gradual improvement in this CI metric for the consolidated business over the coming quarters as we scale up and drive synergies from strategic initiatives as well as the incoming teams in the wealth UHNI segment.

We are very happy to report that the company recorded its highest ever quarterly PAT at ₹331 crores, an increase of 20.3% year-on-year. Tangible ROE rose to 21% as against 20.4% in the previous quarter.

This ratio is expected to improve in the coming quarters as additional capital deployed in our lending and alternate businesses in FY '25 begins to reflect in the overall earnings. With that, I would like to hand over to Anshuman to cover key business and strategic highlights.

Thanks, Sanjay. Good evening, everyone.

Building on Sanjay's thoughts on our overall business performance, I would like to begin with some comments on our core businesses. Our 9-month net flows stood at approximately ₹47,000 crores, with robust organic flows at over ₹26,000 crores, having already equaled our full-year 2025 numbers.

Despite attrition-related outflows that we've spoken about earlier in H1, we've delivered strong organic net flows of ₹19,000 crores or 12% of our opening ARR AUM in wealth management in this 9-month period. The strong performance reflects the fundamental strength of our franchise, the differentiated platform proposition and products, and most importantly, the continued ability to attract senior talent across all our key geographies.

The total net flows in wealth stands at approximately ₹40,000 crores, with the flows being spread across the different regions. Within asset management, we continue to witness strong flows across asset classes.

Net flows of over ₹4,400 crores for this quarter were driven by new funds launched as well as inflows in existing strategies in the listed, unlisted, credit, and real estate space. While we maintain our leadership on advising global institutions on listed equities, we are excited to see increased interest and engagement from institutions seeking exposure to India's private markets.

In this regard, we are happy to state that we have our first mandate from a global institution in the private equity vertical in quarter three. Leveraging our established alternative investment capabilities, we are well positioned to capitalize on such opportunities in the future.

While in parallel, we continue to deepen our distribution footprint in the listed space with a particular focus on expanding reach through the MFD channel. Looking ahead, visibility on multiple fund launches in the AIF and SIF segments, along with ongoing discussions around institutional mandates across strategies, reinforces our confidence in the strength and durability of the overall pipeline.

A quick update on the key strategic initiatives. Starting with UBS, I'm pleased to announce that the signing of our comprehensive global collaboration framework for wealth was completed in November of last year.

We're already witnessing encouraging early traction on cross-border client referrals and remain excited about emerging synergies in asset management as well as other areas. With strong leadership commitment from both organizations, we are well positioned to unlock the potential of this partnership and will continue to update on the progress over the next few quarters.

Secondly, on the HNI segment, our conviction on the potential of that business segment continues to strengthen as we gain momentum in client additions as well as flows. With over 60 RMs across 12 locations, we are now well poised to accelerate the scaling up and build this segment as a vital feeder pipeline as well for our UHNI proposition.

Thirdly, ET Money is undergoing a transition from a transaction-led investing app to a comprehensive wealth platform for the affluent segment, with monetization embedded at every stage. By combining choice-led engagement models and expanding product suite, which aligns with our core proposition and technology-enabled human advice, ET Money is continuing to build a differentiated yet scalable moat, which we are quite excited by.

Lastly, we are pleased to share that BNK Securities is now rebranded as 360 ONE Capital, integrating corporate and institutional equities as core capabilities. This integration not only expands our capital markets footprint, but reinforces our positioning as one of India's most comprehensive financial services platforms spanning wealth management, asset management, alternates, lending, enhanced institutional and capital market capabilities, as well as superior global access.

Overall, we remain focused on consolidating our multiple business lines to deliver a full-stack financial services offering aimed at further strengthening our leadership position with our core clients. At 360 ONE, technology remains a critical investment priority, spanning internal operations, cybersecurity, and client-facing innovation.

We are advancing AI-powered pilots across key functions to drive efficiency gains and informed decision-making, positioning ourselves to expand these capabilities as they further mature. Lastly, I would like to thank our clients and stakeholders for their continued trust and confidence, which has been integral to our journey and progress.

With that, I'd like to hand it over to Karan for his thoughts.

Thank you, Sanjay. Thank you, Anshuman, and thank you for everybody for joining in on a holiday.

Let me start off by wishing everybody a Happy New Year. I want to spend two, 2 to 3 minutes quickly on broadly the last 9 months and our continued focus areas for the next 12 months to round about three odd years, and post that, take a pause and take questions from there.

I think as we look forward and look at the back, I think we continue to be super, super positive on the business lines we spent the last 15, 16, 17 years going deeper and deeper into. Over the last 17 years, I think we've spent a lot of time and energy on building two critical businesses.

One is the ultra high net worth wealth management business, and second is the alternates business over the last 8 to 9 years. We continue to remain extremely buoyant about those two businesses.

Our brand recall as well as our acceptability among clients above ₹50 crores continues to remain at the highest. Our proposition has become deeper and deeper.

Our ability to provide clients advice across multiple asset classes, provide solutions across their entire asset portfolio, our ability to work and sit with them and build their investment policy statements for their entire lifecycle continues to be the strongest ever. Both monetizations on the listed side, unlisted side, sometimes even change of wealth manager on the ground without liquidity events, all of them continue to be fairly active programs for us.

Over the last quarter to the last 9 months, one of the most active things for us has been the ability to add new clients and relationships. It's fair to say over the last 3.5, 4 years, we more or less doubled our entire maybe 2.5 times our entire client base, which we kind of accumulated over the last 12 to 13 years preceding the last 3 to 4 years.

The second portion of business which we are really, really kind of excited about continues to be the alternates business. There we are really thankful to the regulator, and SEBI has taken a lot of proactive steps where we've seen at least three very three excellent kind of new initiatives on the AIF side.

One, clearly, the introduction of the co-investment vehicles. Second is the introduction of large-value funds reduced from ₹75 crores to ₹25 crores.

Thirdly, the introduction of AI investors on the alternate investment fund side gives us a lot of maneuverability and flexibility to be able to kind of keep building our AIF business across multiple strategies. Over the last eight odd years, we built four clear strategies on the AIF side, and on the real asset side, on the unlisted side, pre-IPOs as well as recently on the listed side with the PIPE fund.

I think we continue to remain very, very, very buoyant about the alternates space, and with the new regulations both on the LVF side as well as on the co-investment vehicle side, it gives us a lot of additional ammunition to be able to really take advantage of the ₹50,000 crores we've already kind of built in the space over the last 7 to 8 years. Performance there continues to be fairly robust.

I think 95% of our funds are rated 90 percentile and above from a performance perspective, and most of our old clients continue to kind of come into the new schemes as the older schemes continue to mature. While we remain extremely excited about these two businesses along with our listed asset management business, we're eagerly looking forward to the new businesses we are squarely excited about.

On BNK, the first fruits of our merger together will come through on the equity brokerage side over the next 12 odd months. We definitely see a 25%, 30% increase on our high net worth equity brokerage, as we've typically seen over the last 4 to 5 years.

There we are working very hard to ensure that the research product reaches all ultra high net worth clients and family offices clients in the right way, and effectively, while they've been doing wealth management with us for the longest time, we're able to kind of get them to also looking at equity advice on our platform. Along with that, obviously, over the next 6 to 12 months, we'll build out a good equities and a banking practice.

Most of that would come on the second half of the next calendar year, but we're early days of attracting talent, and it's really heartwarming to meet talent, and we feel encouraged that we're seeing a lot of people who are aspirationally looking at building the business along with us over the next 12 to 18 months. On the segment side, I think obviously, on the ultra high net worth side, we've been fairly positive.

We want to extend it to the mid segment between the ₹5 to ₹50 crores, and that's something which we are working very hard to build on the reserve side. Happy to say that business started off with less than ₹400, ₹500 crores of AUM at the beginning of the current financial year.

In a very steady format, it's grown to round about ₹3,000 crores plus. We kept the retention strong at 100, 110 basis points in that business, building it in a very measured manner, ensuring that we get the building pillars of the business right.

We've now got close to 58 relationship managers on that business, and we got net new flows of nearly ₹2,000, ₹2,200 crores for the financial year from that business. ET Money is a business we'll still kind of take a little bit longer, 3 to 6 months to kind of discover the exact monetization model, but what gives us a lot of confidence there is both brand recall as well as engagement on the platform continues to be at historic highs.

Outside of these two, obviously there's a fair degree of excitement in the ability of building the right inward platform from GIFT City. I think there are a lot of institutions across the world interested in being able to understand institutions as well as family offices in the ability to understand how to access India through the GIFT City.

Overall, if I just kind of combine these business lines together with our client segments, I think we have a large play across multiple asset classes, and it's not restricted only to listed equity. We've got a very, very significant opportunity to be able to play in listed equity, unlisted equity, real assets including REITs, InvITs, yield-based assets, real estate, fixed income, performing bonds, AAA credit, sometimes structured credit, and all of these things put together kind of and the entire global platform.

All put together has kind of given us a fairly wide platform to play with, and it's kind of isolated us with a little bit of sensitivity to the capital markets also, because we're able to kind of tug along in our business lines across multiple asset classes. I think very focused business lines, multiple asset classes, and multiple segments.

What we now want to kind of expand is to multiple geographies. I think we've been again done extremely well in phase one in kind of building out Bombay, Delhi, Bangalore, Chennai, Pune, and Calcutta over the second phase over the last 5, 6 years.

We've built out the next 10 cities: Hyderabad, Rajkot, Indore, Bhavnagar, and so on and so forth. We've kind of really focused hard on building out to those regions.

I think today, honestly, if I can think of another 10 cities including places like Dubai, Singapore, it's a big, big market. Fourth, obviously, we have to kind of ensure that we are able to build a much more significant geographical presence.

In keeping and kind of ensuring that these four things, which is basically asset classes, business lines, segments, and geographies, we are able to go deeper and deeper, two things we'll have to constantly ensure, and these two things give me the maximum amount of confidence. First is, obviously, the platform has to be super robust and has to be able to offer the right set of solutions to the client.

We've worked very, very hard over the last 17 years to ensure that our platform is very robust, and we are able to meet every need of the client, whether it's on the advisory side, whether it's on the planning side, whether it's on the lending side, and whether it's on the brokerage side. We're proud to say today we have a fully aligned platform which is able to meet all the needs of the client.

Second, obviously, we can't compromise on the depth of talent, and that's something which we've kind of worked very hard on. I think from pretty much from 2008 as professional entrepreneurs, we've shared our rewards in a very, very proportionate way, which has led us to having a very, very deep bench of talent.

As we continue to grow, we are able to attract phenomenal amount of talent also. As we faced a little bit of attrition over the last 12 to 24 months, our own ability to add fresh set of legs and an equally enthusiastic and capable set of legs in all our locations as Delhi and Bangalore has really kind of given us a lot of confidence to be able to kind of invest deeper and keep growing larger.

Most importantly, I think, the depth of talent gives us a lot of confidence. I feel much, much more confident as a professional entrepreneur compared to 10 to 12 years back, where effectively, we used to hear things like, they're only 400, 500 people with similar talent across the industry.

I think today that number across businesses is a much larger number, and it's something which we can kind of really invest with a lot of confidence saying we will have the right talent to back our aspirations. All put together, I think four four clear strong business lines, want to kind of build ourselves mostly in a very, very, very large way on the ultra high net worth segment, ensure that we do the right things with the different segments, expand ourselves to different geographies, and keep our talent as well as our platform as strong as possible.

A culmination of all of those things will hopefully kind of allow us to continue growing in the right direction. Thank you.

Anil, we'll just open it up to questions, please.

Sure. Thank you, Karan.

To ask your question, kindly click on the raise hand icon. First in line, we have Mohit Mangal.

Mohit, kindly unmute yourself and ask your question.

Hi. Am I audible?

Yes, go ahead, please.

Yeah. Thanks for the opportunity and congratulations on a good set of numbers.

I've got a few questions. Starting off with we have a very good net flows this quarter, just couple of sub-questions into that.

Has the growth come from the increase in the wallet share of existing clients or is it the newer clients who are putting in more flows? Secondly, how do you see FY '27 now that FY '26 is on a very solid base?

Mohit, thanks. Thanks for the encouragement.

I think on net flows, honestly, I think it's a culmination of many things. It's a lot of things kind of coming together.

I think after many quarters, we've had a very strong net flow number even in the asset management business close to 5 odd thousand crores. To be honest, we've had a good gross flow number for the last three, four quarters.

It's just that our distributions from our first pre-IPO fund, we've actually fully paid those funds out in the last quarter. In that sense, the net flow number on the asset management business at ₹4,500, ₹5,000 crores looks very, very strong.

Don't see it as a one-time. I think we've got a lot of new products on the anvil.

Feel fairly confident about it. On the wealth management side, it's a combination, like you rightly said, of enhancement of wallet share as well as new clients kind of coming in.

I think new clients obviously add to the net flow from a revenue perspective kind of come into play only over the next three to six odd and three odd three to six months as a part of the passive AUM which comes in kind of moves into active AUM over the next three to six months. Overall, I would say, on the asset management side, it's ₹4,500, ₹5,000 crores.

The rest of the flows are largely a combination of increase in wallet share as well as new money coming in. Again, it's a ratio of round about 50-50, 60-40.

Understood.

Any revised upward guidance for FY '27?

I think, to be honest, guidance is kind of automatically revised upwards every year, because I'm just going back to my old model that we need to grow our AUM by 22% to 24%, and assuming a 10 odd percent kind of mark-to-market on a steady basis across all asset classes, alternates, listed equity. We've obviously averaged higher than that, but assuming a 9% to 10%, we need to do 12% to 13% of opening AUM as net flows.

I think as the opening AUM and closing AUM there's a large gap, obviously the next year target automatically becomes 12% of the closing AUM. To that extent, aspirationally, we would always want to get net flows in the region of 10% to 12% of our closing AUM.

In some senses, our kind of guidance is not changing in percentage terms, but in absolute terms, obviously, we need to work much harder to get to that 12% net flows.

Understood. My next question is towards the TBR revenue.

If I look at the TBR revenue even excluding BNK, they have been very, very solid. Can you just share some reasons for this kind of strong growth there?

Sir, TBR revenue is a very interesting line item. I think while they are strong, if you see on a Q-on-Q basis and it's kind of come off a bit.

You see sequentially on a year-on-year basis also, it's not really kind of grown dramatically. I think we've worked really hard.

I would say TBR revenue coming out of pure financial products in terms of managed accounts is practically zero, right, because we are hardly booking any upfront there's no upfront in mutual funds. AIFs are practically really, really small amount.

The rest of the TBR revenue which is really left is largely in some ways brokerage and syndication, right? The good thing there obviously is we've got brokerage and syndication across multiple asset classes.

If you look at brokerage and syndication today, we've got nearly six or seven lines on which we are booking income. The first line which is obviously there is the secondary brokerage coming on stocks, right?

There obviously now we are kind of covering two segments. We're covering the institutional segment and the family office segment through the BNK transaction, and we're covering the high net worth individuals on the secondary side.

I think those three things put together today aggregate to round about a ₹60 to ₹70 crore kind of equity brokerage number on a 60 odd crore, ₹60, ₹65 crore equity brokerage number on a quarterly basis. The remaining ₹115, ₹120 crores, you've got unlisted equities, you've got fixed income and bonds, you've got real estate, you've got a little bit of real assets, and then you've got a really small portion maybe coming through maybe a crore or ₹2 crores coming through insurance and stuff like that.

I think transaction brokerage revenue will really be a function of our ability to work through these five or six asset classes. Eventually, once we build it out a little bit more over the next 3 to 6 months, you'll see some revenue additions coming from things like investment banking and us taking on some ECM mandates and so on and so forth.

Today, I think, to be honest, overall, I would say the quality of TBR is better than where it was 24 months back or even 12 months back. While the number itself might not have grown dramatically over 12 months, but I think from a quality and sustainability perspective, it's a much better number.

I don't see it dramatically increase over the next 2, 3 years. I think it shows a healthy inflation-linked growth.

Obviously, I think a part of that resultant growth will show up in the ARR AUM growth, because it kind of gives us the ability to continuously add more to the ARR as compared to the TBR.

Understood. My last question is that now that the team is there, do you think operating leverage will kick in, and maybe over the next 18 to 24 months, the cost-to-income ratio would look lower?

No, no, we have to increase operating leverage. There's no doubt about it.

I think because at the end of the day, I think today at round about 48.5%, 49% cost to income, I think one of the key objectives we would have for next year is obviously cost optimization. Now cost optimization can happen through three, four three, four things.

It doesn't need to happen at the cost of growth, but obviously, it happens out of three, four things. The first and most important is if I kind of break up the cost-to-income ratio of today 48.2%, 48.3%, we've got nearly 3.5%, 4% coming out of two two kind of businesses which are, I would say, not in the mature stage, which is ET Money and our Reserve business, which is the HNI business.

Those two kind of contribute to round about 3.5%, 4% on the cost-to-income side. On a steady-state basis, the rest of our businesses are at 44.5%, 45%.

I see both businesses kind of being close to Reserve, definitely HNI business definitely breaking even next year or middle half of next year, and ET Money hopefully on a run-rate basis being close to break even towards the end of next financial year. I definitely see let's say out of the 400 basis points, I see round about 200 basis points on an annualized basis 150, 200 basis points recovery on the cost-to-income ratio on these two items put together.

On the core business, I think we need some productivity gains. I wouldn't say productivity gains obviously comes in two formats.

I think there are some places where we may have kind of over-recruited over a period of time over the last 3 to 4 years, which automatically kind of gets adjusted through growth in business. Second, obviously, as we build out new businesses, we have a lot of talent within the system which we have the ability to kind of move around.

Overall, I think we should be able to achieve a 100, 125 basis points, 150 basis points improvement in cost to income on the core business, and potentially another 125, 150 basis points on the new businesses. We would definitely, as a team, want to target 45% to 46% for next year.

Hopefully, we can get to 45% aspirationally, but otherwise 46% for sure, compared to the 48.2% we are at now.

Understood. This is very helpful.

Thanks and wish you all the best.

Thank you.

Thank you. As a reminder, you may click on the raise hand icon to ask your question, and we'd really appreciate if you could restrict yourself to two questions.

Next in line, we have Niranjan Kumar. Niranjan, kindly unmute and ask your question.

I hope I'm audible. Yes.

Sir, thank you for giving the opportunity and congratulations on the good set of numbers. Basically, I have two questions.

One on the flows on the retentions, where can we see the retentions for both in the wealth management business and the asset management business? Second, carry income in PPT it is mentioned it is 6 basis points, on what basis it has been calculated, because my number is little different from the number which is reported in the data book?

That's it from myself.

Sorry, what was the first question? How do you see the retention settling?

Retention. Yeah.

Retention will be similar. I don't see any dramatic change in retentions.

I don't think so there's any industry-wide change from a retentions perspective. I think on the alternate side, we continue to see approximately a 70, 75 basis points retention ex of carry.

We see ourselves booking approximately 15 to 20 basis points of carry, and potentially the listed side of the business will continue between the 55 to 60 basis points. Potentially, that's where it may go down to 50.

I think broadly, depending on the mix between the alternates and the listed side, we'll be approximately at the 73 to 75 basis points kind of retention. Wealth continues in a similar kind of orbit.

Really, from a pure retention perspective on the ARR AUM, don't see much change at all. On the TBR side, obviously, it's not going to be linked to the AUM exactly.

It's going to be linked to some of the parameters I spoke about earlier. On the 6 basis points, I'll just request either Anshuman or Sanjay to comment.

The 6 basis points refers to the incremental carry that has come in and that has got recognized in this quarter itself. We've shared earlier as well, we have a carry accrual policy, a relatively conservative carry accrual policy, and this is just referring to the incremental carry that's come in.

On a normalized basis, therefore, we expect the retentions to go back to the 75, 76 basis points level for next quarter onwards. Thank you, sir.

That's it from myself.

Thank you. Next in line, we have Nitesh Jain.

Hi, sir. Hi.

One question is on retention. If I look at retention, managed accounts, the retention has gone up quite a bit.

Is it because of carry that we have got in that segment?

A little bit because of carry, 3 to 4 basis points, but otherwise it's broadly in the region of Sorry, 1 second.

Let me It has gone up by 80 basis points.

No. So 3 to 4 basis points is naturally.

The rest is largely on account of carry.

Okay. Carry, we account on a accrual basis each quarter, or is it one of the quarter, because I think last

No, no. Broadly, the way we've been accounting for carry, we've kind of described it in a note earlier, but broadly speaking, we kind of do it on a fairly conservative basis.

Two or three things we kind of take into account. Number one, carry for the fund should have kind of crossed the hurdle more or less for the entire life of the fund, okay?

Effectively, the chance or the probability of the carry getting reversed is next to negligible, because if it's a 6-year fund, it should have crossed the hurdle for the entire time period. Secondly, the fund should be 18 months 18 months away from maturity.

I think these are the two two things which we broadly follow from a recognition of carry perspective.

From a timing perspective, in any quarter where we reach this eligibility, then we recognize carry, because I think last

Yes. Yes.

Right now, for example, I think we've got carry recognized broadly only in two or three schemes right now, yeah.

Secondly, in the net flow, I have seen pretty strong net flow in non-discretionary PMS. I think we have been highlighting in the past that we try to move these clients to discretionary PMS, but that is not playing out.

What is inhibiting that, and how do you see that?

I think discretionary PMS could improve for sure. I think but let's kind of, yeah, take it one step back.

I think discretionary PMS or what's called kind of net owned funds across the globe, it's the toughest kind of franchise to build. It's kind of represents the maximum trust the client can have with you, because he's kind of giving you full freedom on a multi-asset class basis, okay, to manage his money and kind of just do a review with him once in a quarter.

I think it's a slightly tougher mandate to build. Do we believe in it?

The answer is 110%. Eventually, it's going to be one of the most important kind of platforms to build.

I think if I look across the globe, whether it's in Europe or in Asia and the US, it started out very slowly. Fast-forward to maybe 5 years from the time it started out, today it's a good 20%, 25% of every large private bank's portfolio.

I would expect it to keep growing. I think performance has been good.

Obviously, the ability to make a difference in performance is not as sharp as you have on the alternate side, because discretionary PMS, by definition, is more or less a 100% liquid portfolio. I think we've differentiated ourselves a lot by kind of diversifying, having a right quantum in REITs, InvITs, commodities, and so on and so forth.

I think it's just a question of time. I think every client will end up allocating a portion to the discretionary PMS side.

If there is one number which I would like to improve over the next 12, 24 months would be the discretionary PMS number.

Sure. Thank you.

That's it from my side. Thank you.

Thank you.

Thank you. As a reminder, in case you wish to ask any questions, kindly click on the raise hand icon.

Next in line, we have Abhijit Sakhare. Abhijit, kindly unmute and ask your question.

Hey, hi. Good evening.

Hi, Abhijit. My first question was that over the last 1 year, there's been lot of discussion with respect to talent, right?

When I look at things, you're like a large incumbent when it comes to the wealth business, right, which is considered to be slightly stickier, high quality. The way the new businesses are getting built up, like equities or investment banking, right, there we're like a challenger, right, in terms of trying to acquire new talent.

How do you kind of look at the current phase of the industry with respect to being more aggressive or conservative between the two businesses in terms of protecting existing talent on wealth, as well as kind of being more aggressive to chase talent to build the newer businesses?

I think both are separate and great questions. I think from protecting existing talent perspective, I think it's a combination of three or four things like we've always maintained.

Number one, I think obviously, there's a certain culture to every organization. From our perspective, we're 24/7 focused on managing money for clients.

I think just the ability to give comfort to our relationship managers and to our team leaders and to our heads of businesses that not only what they're promising to the clients, but the ability to keep the client money safe and deliver the right objective and outcome and we are fully committed to it is extremely important. Second, obviously, they should have the ability to be kind of armed with the right set of products and platform to be able to go out and do business.

Once these two things happen, there should be alignment of interest. I think all our employees understand extremely well that there are three three stakeholders in every business.

There's a investor, shareholder, there's a management, and there's a client. Ultimately, economics have to be kind of split in a right rational manner between the three stakeholders.

I think as long as we can kind of continue to do that and explain that to our existing talent, I think most of them continue to steady the ship and kind of ride the ship along with us. In terms of new talent, we're unlikely to be crazy aggressive.

We typically would take our time. I think even on the banking side, I think in total, we've kind of given out two offers as we speak over the last 3 to 4 months.

Obviously, we've ended up meeting a lot of people, and we'll continue to meet a lot of people. We will be selective.

We will focus on building out the top seven, eight top seven, eight people in banking, and we really build teams around them. It's not going to be a quick hiring process.

If you honestly see our business model also, banking's really not even set out for a large revenue build-out over the next 12 odd months. From a BNK acquisition perspective, we really see the first fruits of our labor play out in the next 12 months on the equity side, and the year after that potentially on the banking side.

We're going to take some time to hire banking. I think we would take anywhere from 0 to 6 months to kind of get our six to eight business heads in.

From a compensation philosophy for these six or eight people is going to be very much aligned the way we built our wealth business. It's going to be a combination of empowerment.

That's number one. I think that's most important for people.

Number two, obviously, kind of ensuring that there is alignment of interest and culture. Number three, along with that, ensuring that, as business results get delivered, there is enough alignment of interest from a wealth creation perspective.

I think that's really the philosophy we've followed whether we built out the wealth business or even the more recently in '17, '18, the asset management business. I think we continue with the same philosophy.

We are unlikely to kind of change our compensation paradigm too much. Got it.

Thanks for the detailed response, Karan. There's just one more question on when we think about next year's financials.

Right, like you mentioned the growth on the ARR AUM, right, still seems on track to be between let's say 20% to 30% based on how the market's to. TBR, I'm not sure how we should think about growth on current year's base, but definitely there's a lot of operating leverage like you hinted.

Does all of this sort of basically hint at or imply a fairly substantial earnings uplift as you see things today? It's really tough, but I'll try and answer it in the best way possible.

I think, to be honest, I'll just go back to March, April '25, right? Round about 9 months back from today, because these things happen in spurts, and they're not really as linear as we would want it.

I would like to believe April '25, and if I look forward 3 years from April '25 to April '28, I would want to come back to my old number of 22% to 24% AUM growth, 16% to 18% growth of revenues, and 22% to 24% growth in profits, yeah. If I just look at my ₹1,000 crore ₹1,000 crore profit number of April '25, would be disappointed if we can't be in that zip code of give or take, ₹1,800 crores to ₹2,100 crores of profit after tax in 3 years from there, effectively '25-'26, '26-'27, and '27-'28.

I think that's really the way I would look at it. Obviously, it needs a lot of things to fall in place.

Honestly, if you ask me as a management, we're really striving for a 22% to 24% AUM growth, 16% to 18% revenue growth, and therefore, a corresponding 22% to 24% profit growth there. Thank you.

Super helpful, as always. Thank you.

Thank you. Next in line, we have Dipanjan Ghosh.

Hi, Dipanjan.

Yeah. Just few questions from my side, Karan, just taking cue from the last question, and maybe I've asked this question a few times in terms of the carry profile.

Now obviously, we don't have significant visibility on the funds that are about to exit, not now, but let's say FY '27, '28. When you give this guidance of let's say, or expectation of let's say ₹1,800 to ₹2,100 crore of expected profit after tax, depending on market conditions and multiple other things, what sort of sensitivity to carry does this number really holds?

If you can give some clarity on, at least for the next few quarters, how should one think, because you're significantly above your stated guidance, at least for now? The second question is on the flow side.

Obviously, the flows have been quite strong during the quarter. If I just look at the wealth flows, obviously you have onboarded a few new teams over the last 6, 7 months.

When some of the people exited from the firm, we saw outflows. Can you give some color on the quantum of flows that some of these new teams onboarded now, or maybe in the last 2 years, would be bringing in versus the existing ones?

Just one factual question in terms of the product pipeline on AMC.

Sir, I think broadly 20 to 25 basis points is the broad carry assumption we work with. Historically, we used to work with 10 to 15 basis points.

I think over the last couple of years, we made it 15 to 20. I think it's fair to say that now we're kind of factoring in 20 to 25 basis points, because we've launched a lot of our schemes over the last 2.5, 3 years, and ₹25,000

for alternates.

Yeah. So 20, 25 basis points of the ₹50,000 crore number is effectively what we are I think we've we expect, and and just given the way we are accounting for carry on a fairly conservative basis, I think there will be, more or less a symmetrical number of ₹25 to ₹40 crores of carry a quarter.

Having said that, there obviously can be events and there can be listings and so on and so forth where there's a sudden and if we have a concentrated position in that stock, that that that can lead to a little bit of an uptick in carry. Typically, if you see ₹25 to ₹40 crores a quarter is broadly the assumption.

I would I would say a healthy number to assume for us would be 25 basis points of our alt AUM. For alt AUM today is round about ₹50,000 crores, ₹125 crores of carry is par for the course.

We have round about 75 odd basis points of management fee. If you add the two, approximately 100, 95 to 100 basis points of retention on alts is pretty much the right way to look at it.

Similarly, on the listed side, we would have round about 60 odd basis points. Both put together on a blended basis, 60 and 100 would give us round about 80 odd basis points.

That's the way I would broadly look at the look at the look at the numbers. Second, in terms of flows, I think new teams have just about come in.

They've they've mostly most of them have joined over the last 45 days. A large team joined a week back.

I think in terms of flows right now, the new teams have just started coming in. I don't think so it's a massive, massive contribution from the new teams yet.

Hopefully, it'll kind of step in over the next 3 to 9 months. Obviously, we've we've got a large large amount of clients, a large team already there which is kind of firing.

If I look at both if I look at both our markets, North and North and South, I think North this quarter is actually marginally marginally positive in terms of flows. South is significantly positive.

Overall, I think, both both North and South, or Delhi and Bangalore rather, not whole of North and South, which were kind of maybe a little a little negative, effectively become positive. I think, we will we will get back a lot more market share in the next couple of quarters in these in both these locations.

Product pipeline. Lastly, on the product pipeline, I think no specific one product to talk about as such, but we've got something on the private side.

We've got something on the on the on the on the on the on the mutual fund SIF side. We've got something happening on the on the real asset side.

We've also got a a product happening on the on the REIT side. We've got we've got four or five things happening through the quarter.

Obviously, obviously, a lot of a lot of those continue to continue to attract a lot of interest. We've also launched a couple of very interesting funds for the GIFT City.

Overall, I think a fairly healthy product pipeline, and there's not not not something like one single big bang, but all of these things kind of they're multiple asset classes and multiple formats, they all kind of add up in in in their own way.

Got it, Karan, and thanks for the answers, and all the best.

Thank you. Thanks a lot.

Thank you. Next in line, we have Lalit Deo.

Lalit, kindly unmute and ask your question.

Yeah. Hi, sir.

Good evening. Good evening, everyone, and congrats on a good set of numbers.

Sir, just two questions. Firstly, on the UBS, last quarter, we highlighted that their products will start getting referred on both the platforms, where are we in that journey?

Could you also comment on the unit economics over there? That was the first.

Second was on just a factual question. In the ultra HNI business, we mentioned that we have hired new teams.

What will be the number RM numbers over there, and how should we look at for the next year?

On the UBS side, I think as Anshuman mentioned, we've just signed the collaboration agreement 3 weeks back. I think from a real business perspective, I think it starts from 2, 3 weeks from today.

In all honesty, from a practical onboarding perspective, because for our products to get onboarded on the UBS platform itself is a massive due diligence exercise. We are launching one of the UBS products on our platform, which I think takes approximately I think 6 to 8 weeks from today from a regulatory approval perspective.

I think we will see actual numbers kind of translating from April, May onwards, I think potentially April onwards. From a unit economics perspective, it's absolutely on a market basis.

Pretty much where we are a manufacturer, we earn like a manufacturer, and UBS earns as a distributor. Where we are a distributor and UBS is a manufacturer, it works vice versa.

Obviously, on the client referral side, in the first year, the economics is more biased towards the introducer. As time goes by, it becomes more biased towards the person who's managing the account.

That's as far as UBS goes. As far as the new What was the second question?

Sorry.

The RMs,

RMs for UHNI. The RMs on the ultra high net worth segment have grown to round about 190, 191 odd relationship managers, plus a few teams will get added over the next 3 to 6 months where the offers have kind of already been given.

It's grown from round about 155, 160 to round about 191. I think our previous peak was round about 170, 175.

We lost around about 15, 20 people, both the maybe 22, 23 people in both the places put together, which is kind of got added back, plus we've added maybe another 15, 18 people. Round about 190 bankers, 191 bankers.

Going back to my old numbers, I think broadly would like to see a number around the 300, 350 mark over the next 3, 4 years. I think we need to add round about 40 to 50 good, talented bankers every year.

Sure, sir. Thank you.

Thank you.

Next in line, we have Siddharth. Siddharth, kindly unmute and ask your question.

Hi. Congratulations on a great set of numbers.

A couple of questions. First, you mentioned about discretionary PMS really being sort of a tough one, right?

On that, one thing that I observed was there is a sharp retention drop in Q3 compared to the 40 odd 40 to 45 basis points trend that we've been seeing over the last few quarters. Just wanted to understand if that was more a particular mandate.

Are you seeing some competitive intensity increase there? That's question number one.

Similarly, on the mutual funds side also, if we look at it, right, in terms of the retention of distribution assets on mutual funds, that's also slightly sloping down, and that could be a function of just asset allocation between equity and debt. Just wanted to understand how we should think of that retention over the next four quarters or so, given that asset allocation will continue.

That was on the retention side. Second was in terms of capital allocation right now with with UBS warrants, etc.

also coming in at one point in time on the capital front, how should we think through your capital allocation over say the next 12 to 18 months?

Thanks. No, I think from I'll start with the questions on the capital allocation and then I'll move ahead on the retention portions.

I think, broadly speaking, on the capital allocation perspective, nothing really big in terms of change. I think we continue to use our capital for two things.

I think for the alternates business as well as for the broad NBFC. I see both continuing to grow, actually.

I think unless and until we get some real acquisition opportunity, none of it which we see now, I think most of our capital will kind of go back into growing our NBFC book as well as kind of ensuring that we're able to deploy a little bit more capital into our own alternates. From a dividend perspective, obviously, we continue to remain 45% to 70% of our profits around outside of our alts business and our NBFC business being declared as dividends.

I think the aspiration obviously on a capital allocation basis is with the increase in profitability to move towards the mid-20s in terms of ROE on a intangible basis, and including the goodwill assets and the other assets, try to move towards the late teen numbers from an ROE perspective. From a retention perspective on the AUM side, I think no real change.

I think we had some AUM and a single mandate which was kind of transferred from UBS, which had a small impact. Otherwise, one of the larger impacts had a larger AUM had a 5 basis points reduction.

Not really anything which is kind of not repetitive. I think the discretionary retention remains around the 45, 50 basis points outside of these two.

The non-discretionary will continue between the 28 to 35 basis points. No big change there.

The discretionary mandate honestly, it's not a function of retention. I think it's just a function of a little bit more acceptance.

As acceptance kind of builds out, I see that we don't see really any pressure on the discretionary mandates from a retention perspective. It's just that it's a multi-asset class tool.

It needs acceptance from the client as well as the relationship manager. From a relationship manager perspective, obviously, he needs to see some value addition over and above the core portfolio he's managing on his own.

Got it. That's useful.

Thanks. On the HNI front, just wanted to understand if you've been giving some very good color in terms of how each of these businesses have progressed, right?

There the investments have stabilized for the last two quarters at ₹18 crores, but so has the top line, right? Therefore, is this are you envisaging a little not a delay really, but a longer time than what you had projected in terms of that HNI revenue growth sort of ticking upwards, or how should we think of that?

I wouldn't still measure the HNI business from a pure revenue perspective that quickly, because I think the more important number there would be net flows and AUM growth as well as the relationship manager growth. Since it's fully trail-based and is running on a 100, 110 basis points retention, the revenue numbers need to accumulate over a period of time for it to really increase.

For example, a ₹2,400 crore average AUM of Q3 versus a ₹2,700 crore average AUM of Q4 will not really kind of show up in revenue numbers, but it will have an element of ₹200 crores of mark-to-market growth and potentially a ₹400, ₹500 crore element of net new flows, which on an average becomes ₹200, ₹250 crores. Overall happy with the ₹450 crore opening AUM number going to ₹3,000 crores.

Could it be faster? The answer is yes.

We just don't want to kind of quickly add 250 relationship managers across the country. We want to be sure of what parts of the client's wallet share are we adding value to, and then build it out.

I think we are at a place where we are fairly confident and we're going to pretty much break even in 3 to 6 months. Post that, you'll see us expanding in a slightly more disproportionate way.

Glad to see the clarity in how this is playing out. Thank you very much and all the best.

Thank you.

Thank you. Thank you, and this brings us to the end of our earnings call.

Thank you for joining us. Have a nice evening.

Thank you. Thank you, everybody, for joining in.

Happy New Year again. Thank you.