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.

Sanjay Wadhwa, CFO; and Mr. Anshuman Maheshwary.

I now hand it over to Mr. Sanjay Wadhwa to take this call forward.

Thank you.

Thank you, Anil. A very good evening to all the participants and thank you for joining us on our Q1 FY 2027 earnings call.

Before turning to the financial performance, a brief word on macro backdrop. Indian equity indices staged a broad-based recovery over the quarter, navigating a period of geopolitical uncertainty with characteristic resilience.

The resilience was equally visible in flows into the domestic asset and wealth management ecosystem, reaffirming our conviction in the industry's structural growth story. India's wealth market remains deeply underpenetrated and represents a significant growth opportunity.

For a franchise like ours that is positioned at a premium end of the market, this represents an opportunity to compound our leadership over the coming years. Let me turn to the numbers.

Our total ARR AUM increased by 19% to ₹3,42,000 crores, with Wealth AUM at ₹2,42,000 crores, a growth of 24.2%, and Asset Management AUM at ₹1 lakh crore, an increase of 8.2%. Overall AUM rose by 17% to 7.8 lakh crores as on June 30th, 2026.

We garnered the ARR net flows at ₹10,815 crores in this quarter as compared to ₹8,985 crores in the previous quarter. The wealth business drove the increase, contributing strong flows of ₹13,379 crores as compared to ₹6,957 crores in Q4.

It is a clear reflection of sustained momentum in our core UHNI franchise, amplified by contributions from recently onboarded teams. On the asset management side, even as gross flows remained very strong at approximately ₹4,000 crores, the net flows were negative due to one large outflow in an institutional mandate.

Q1 FY 2027 ARR revenue stood at ₹614 crores, up 20.3% year-on-year, with ARR revenue now comprising 75% of total revenue from operations. ARR retention was at 74 basis points, with Wealth at 71 and Asset Management at 83 basis points.

TBR rose by 37.3% year-on-year to ₹208 crores during the quarter. Total revenue increased 20% to ₹870 crores, driven by strong growth across both Wealth and Asset verticals.

Total cost stood at ₹446 crores, with a cost-to-income ratio of 51.3%, as compared to 53.5% in Q4 FY 2026. We expect gradual improvement in this metric as these businesses scale up, we drive synergies from strategic initiatives, and incoming wealth teams reach full productivity.

We are very happy to report a profit after tax of ₹330 crores, an increase of 14.8%. Tangible ROE stood at 19.4%, and we expect this to improve as capital deployed in our lending and asset businesses begin to reflect in earnings.

Before turning to a brief update on our individual businesses and strategic initiatives, let me reiterate the structural backdrop underpinning our confidence. Acceptance of professional wealth management continues to rise, and wealth creation at the top of the pyramid is outpacing the broader economy.

For a full-stack platform spanning across wealth and asset management, this is a long and durable runway, and our strategy remains centered on being the manager of choice for our clients' core portfolios. Our UHNI franchise remains anchor of the firm and continues to perform very well.

The addressable market spans 40,000 to 45,000 households, and our focus is consistent across three vectors: deepening wallet share of existing clients, extending beyond the top cities, and being the manager of first choice post monetization events. Our advisory-led proposition continues to gain traction as clients migrate from transactional, product-driven engagement to portfolio-level, solution-oriented mandates, enabling more comprehensive services across the platform and relationships that endure across cycles and generations.

We continue to invest ahead of the curve across RM capabilities, technology, portfolio analytics, and client data security. Our HNI proposition is scaling well and is a natural extension of the UHNI franchise.

The program now spans approximately 60-plus relationship managers across 12 locations, managing in excess of ₹5,000 crores of AUM for 800-plus clients at ARR retention yield of around 90 basis points. What makes this segment strategically important is not just the 200,000-plus household opportunity it opens up, but that it acts as a powerful feeder pipeline into our core proposition, supported by a digital-first, scalable operating model, a state-of-the-art client and RM app, and referrals from our existing client and RM base.

As business momentum continues and productivity builds through the year, we expect the business to break even on direct cost by end of this year. FY 2026 was a year of deliberate strategic transformation of the ET Money business, resetting the business model towards profitability.

We expect the business to reach break-even level this year. In the institutional business, the institutional equities franchise continues to perform strongly, with 550-plus mid and small-cap companies under coverage, 300-plus institutional clients, and over 85% of broking revenue from the cash segment.

More importantly, the synergies envisaged at acquisition are coming to life. Broking income from UHNI clients is seeing an uplift, and access to 600-plus corporate treasuries is opening meaningful cross-sell into wealth, treasury advisory, and lending.

Our ECM-focused IB capabilities, while still building out, are showing strong early traction. We expect the broking mix to turn steadily more annuity-like as institutions scale up and UHNI participation rises.

Our asset management business continues to be a structural growth engine, and its quality is reflected in a rising ARR contribution and improving cost efficiencies. AUM has now crossed key milestone of ₹1 lakh crore, with strong momentum across our alternates platform, comprising of private equity, private credit, real estate, infrastructure, renewables, and multi-asset, as well as listed strategies.

Our product engine remains active and extremely effective. We continue to broaden the shelf across AIF, PMS, and MF platforms, including SIFs.

The offshore opportunity is building steadily, aided by global institutional mandates and the distribution reach that our collaboration with UBS opens up. We continue to see steady progress across the various components of our UBS collaboration.

Cross-referral programs across NRI, resident, and global mandates are showing early traction, and we expect these to convert into meaningful flows over the medium term. UBS's global distribution is also expected to open up offshore capital access for our alternates and listed strategies during this year.

Taken together, these businesses reinforce the 360 ONE flywheel as a single integrated platform across wealth and asset management, in which each business strengthens the other and deepens our relationship with the client. I would like to thank all our stakeholders who have been with us, and with that, I'll hand it over to Karan for his comments.

Thank you, Sanjay. The floor is now open.

We have Karan join us. In case you wish to ask questions, I request you to kindly click on the raise hand icon.

We'll give it a minute for the questions to queue up. I request Mohit Mangal, kindly unmute yourself and ask your question.

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

I've got three questions. My first question is basically on the net flows.

I think we are on the target to achieve that 12% to 15% of opening net flows. Do you think it would be more lopsided towards Wealth as AMC is kind of seeing outflows specifically in the PMS over the last two to three quarters?

Mohit, do you want to do all three questions and I can answer it?

Okay. Basically my second question is on the cost-to-income ratio.

I think we have this kind of mandate to go at least 150 to 200 basis points decline. This quarter also it was more than 51%.

Should we expect the remainder of Financial Year 2027 to have that operating leverage and decline in cost-to-income? Lastly, basically an industry question, wherein we are a significant player in the private credit industry.

Just wanted to know how do you see the future for this segment and how are we kind of positioned to increase our dominant position for it?

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

Very quickly starting on the net flows, I think last quarter generally speaking, FII flows into India as well as large institutional mandates have been a little tepid. Outside of one institutional mandate kind of reducing its allocation from round about $550, $600 million to round about $175, $180 million, the rest of the mandates have stayed quite strong.

Generally speaking, global allocations to listed equity has been fairly muted over the last six to nine months. Outside of that, obviously on the alternate side, we've had good flows over the last six to nine months.

I think honestly, from an AMC perspective also, I think when I look at our net flows of round about give or take 40-odd thousand crores, which is 12% to 15% of the number we've kind of started out with, we started out with ₹2,40,000-odd crores of ARR AUM, 30,000 to 40,000, 35,000 to 40,000 crores of net flows, I think I would like to still believe our net flows will be broadly broken up as 70/30, 75/25, broadly in the split being in the favor of the wealth business. Last quarter obviously the asset management business slightly lopsided because of one partial redemption on the institutional mandate side.

We have a lot of product launches kind of planned out for the next six to nine months, which should average out the flows between the wealth and the asset management side. PMS as a structure obviously is a little challenged because I think purely portfolio management scheme versus, let's say, today doing the same product on the AIF side or potentially on the mutual fund side or even on the SIF side, those three structurally present slightly better platforms to launch the same product purely on the equity PMS side.

While the strategy is alive, while the same set of clients for the same set of reasons they used to come into the PMS will come in, but most likely it'll find its way into these three pooled structures as opposed to coming into a PMS. On the cost-to-income side, I think we've taken two or three steps.

I think number one, HNI business is kind of come to fold fairly well. I think we moved our AUM from round about 600-odd crores to 4,000, 3,900, 4,000 crores last year.

Then current quarter has moved from 4,000 crores to round about 5,100, 5,200 crores. Systems are stable, execution is happening, onboarding is fully digital.

Outside of us launching the execution platform on that platform, I think the platform is extremely stable. We are in a position where today I think with 65, 70 people, we feel fairly confident.

We will over the period of next two to three months also move our small amount of clients who are between the one to two to two to nine-crore segment or two to 10-crore segment into the HNI piece. I think together with that and the constant organic growth which has happened in the HNI business, I feel the HNI piece will also kind of not only break even, but may move into a little bit of profitability this year itself.

ET Money, we kind of restructured quite a bit over the last quarter. I think on a run rate basis, if I exclude the costs associated with exits, we are now down to round about a three, 3.5, 4-crore quarterly loss per quarter.

We've seen 7 crores last quarter, potentially see another 6, 7 crores for the current quarter, but post that by the end of quarter four, we'll be close to break even on the ET Money side. ET Money together with the HNI piece should definitely help us retract the cost-to-income by round about give or take 100, 150-odd basis points.

A little bit of operating leverage both on the alternate side of the business as well as on the wealth management side of the business should hopefully take us on Q4 basis from 51 to round about 49, 49.5, and potentially for the full year, approximately 100, 150 basis points from where we are today. That's the picture on the cost-to-income.

On the industry side, I think private credit, real assets, private equity, as well as renewables, all four remain a very, very promising landscape for alternates. I think we've obviously done a lot of work on the first three, which is the private equity side, the real assets side, as well as the private credit side.

I think private credit in India is in a very, very interesting threshold. It's obviously a very, very vast industry.

It starts out all the way from instruments between 9% to 10%, all the way ranging from 13% to 15%, and also moving into some second special situation opportunities with 18% to 20%, and then potentially some structured credit opportunities with a bit of fixed income as well as equity linkage, which could be higher. From our perspective, we've really been operating more on the first two buckets, which is really the 10% to 11% and the 13% to 15% bucket.

The good news there is accidents have been negligible to zero over the last seven to eight years. We had a fairly stellar track record in that.

Having said that, obviously, we've not kind of ventured into the deep private credit side. Two or three things which have happened in India where the regulators been kind of super cautious and rightly, and allowed the industry to do extremely well are two things.

One, obviously, unlike the rest of the world, I think we really don't have semi-liquid or kind of partially liquid funds. There's really no schemes which have gated redemption pressure.

In that sense, that's kept the private credit industry going quite well. Secondly, I think just the pure nature of we've seen a lot of institutional demand from insurance companies as well as other domestic institutions to participate on the private credit side, just given the long tenure of the money they have to manage.

The ability to generate that extra 250, 300 basis points over a longer time period is extremely interesting to them. Overall, if you ask me, I think the private credit industry is in a very, very nascent stage in our country.

I think it's over a period of time, I think I would not be surprised if it continues to grow as fast as the private equity industry itself.

All right. This is very helpful and clear.

Thanks and wish you all the best.

Thank you, Mohit.

Thank you. May I request you, in case you wish to ask a question, kindly click on the raise hand icon.

Next in line, we have Prayesh Jain. Kindly unmute and ask your question.

Hi, thank you for the opportunity. Karan, three questions.

Firstly, a broad look at your retentions in this quarter. It's been kind of down across the board, and so even if I exclude the carry, I think there seems to be some pressure on retentions, whether it's in AMC or whether it's in wealth management.

There seems to be some kind of pressure, if you could allude as to what are the factors that are kind of driving that. Second question is on UBS.

You spoke about ET Money and the HNI segment breaking even, but I would presume that incremental flows coming in from UBS can be a big operating leverage, because I don't think there could be a large element of cost associated with UBS mandates. Lastly, in your previous call, you had mentioned about the RM addition target of taking the RM count to about 400 in the medium term.

Would that mean that your cost-to-income kind of stays elevated? You kind of guided for it to improve by 100 basis points, 150 basis points from the point where we are today.

Structurally, how should we think about the cost-to-income, that it stabilizes at the levels that we see in the current year, or do we see further improvement going ahead? Those would be my questions.

Thanks.

Thank you. I'll quickly start with the questions on the retention.

I think broadly retentions are kind of down approximately from 78 to approximately 73, 74 basis points. I think largely out of the 4 basis points, half of that is broadly attributed to carry.

Out of 4 basis points, 2, 2.5 basis points is really a function of carry recognition largely on the asset management side and partially on the wealth management side. The remaining 2 basis points is largely a function of the mix of business.

I think on the wealth management side, I think the advisory business has a slightly lower retention than the distribution business. Also the TBR typically speaking, for no specific reason, but typically slightly lower in Q1, Q2 as compared to Q3, Q4.

Those are two things kind of impacting the retention a bit. On the ARR side purely on the wealth side, it's just one or two basis points is largely a function of the mix.

Similarly on the asset management side, it's really nothing much outside of the mix of the business. For any specific business line itself, we've not seen any reduction in margins.

I think advisory continues to be broadly in that ballpark of 30, 30-odd basis points, 30 to 35 basis points on an average, 25 to 27 basis points for large mandates, and 30 to 35 basis points on an average. Discretionary continues to be in the region of 40, 45 basis points, and distribution largely in the region of 65, 70 basis points.

It's really largely a function of mix. Round about, give or take 1, 1.25 basis points.

The only place where we see a little bit of retention pressure which will kind of keep playing out is on the pure listed side of the asset management business. I think that business kind of will continuously see a little bit of margin pressure.

For us, obviously, it contributes round about 8% to 9% of our revenues. That's the only place where I feel there'll be a headline decline in retentions.

Otherwise, I would give or take, not hazard a guess, more accurately then between 70 to 75 basis points on the ARR AUM. I think there might be quarters where it goes towards the 70, 71, and there will be certain quarters where it's towards the 74, 75.

It will be between that 70 to 75 basis points. I think on the UBS side, obviously, I think we started the process of onboarding our funds mutually and referring clients from January to March of the current year.

I think we've made super progress. Would be fairly certain to say that in the coming quarter, we should have some funds launched both ways, UBS potentially launching some of our funds and we launching some of UBS's funds in India, and simultaneously also referring clients to each other.

I think we've got a certain AUM number, a fairly conservative number, but in the region of $500 to $600 million hopefully to get kind of exchanged between both the organizations over a period of time. That's really what we want to use as a measure of collaboration.

I think that's really the first step rather than trying to look at cost-to-income and trying to see profitability numbers out of it. I think if both the organizations can add value from the collaboration and ensure that we are able to kind of add value to our platforms, that's really where our step is.

We're fairly confident, over the next three months, we'll start seeing some money actually exchanging. Similarly, by the end of maybe a year from the time we started, which is Jan to March, we'll definitely be close to some of the internal targets we've kind of set out for ourselves.

On the RM count, we currently obviously wanted to add round about, as you rightly said, move towards the 350, 350 to 400 RM target number. I think we've broadly got a target number of 9,000 to 10,000 families as compared to the 4,100 families we have today over a three-year time period.

Now, all things being equal, 10,000 families would need round about 300 to 350 RMs to manage. Today, potentially that means we add round about 30 to 40 RMs a year over the next three-odd years.

Obviously, some internal junior RMs will also keep escalating and kind of move up to become senior RMs. So 350 to 400 senior RMs over a period of time would need round about 30 to 40 RMs to get added.

I think, to be honest, that's one part of our business on the wealth management and ultra-high-net-worth wealth management side, which typically kind of relationship managers are able to kind of work within the system extremely well and potentially break even in our system substantially faster than most other platforms. If I look at our core stable ultra-HNI cost-to-income, typically tends to be in the region of 45-odd percent.

We always assume a 100, 200 basis points for expansion and for new people to come in and productivity to kind of get settled in. There we are fairly convinced about being at the 44, 45 mark long-term and 46, 47 mark depending on how recruitments pretty much happen.

That amount of operating leverage is built in because every year there are a cycle of people who joined last year who are becoming productive this year. In some senses, it's a perpetual hiring curve.

I think on the ultra-HNI side, really I think the cost-to-income remains in that 46, 47 zip code, including some of the hiring we have to do. The bridge between the 50, 51 to the 47 number is really not getting subtracted out of the hiring on the ultra-high-net-worth side.

Just one follow-up, Karan, on the UBS thing. If you can delve some bit on the unit economics of the business that you would have in mind if you kind of reach the $500 to $600 million asset transfer between the two entities, what kind of revenue potential or does it operate at the similar cost structure what we have today?

How should we think about this if it gets added to your revenue AUM in the

Honestly, I wouldn't want to kind of just go absolutely deep down from a unit economics perspective, but I think at a headline level, at a very headline level, it's fair to say that it's mutually very accretive for both firms at whatever retention we're able to do business. Because honestly, I think from an India perspective, we have a very strong platform already built out, and I think UBS from our collaboration perspective already has a large, large platform built out.

Obviously doesn't disproportionately add to our costs. Obviously, I think from a retention perspective and pricing perspective, the market will discover it.

I definitely see it being fairly accretive to the P&L. Exact terms of retentions and unit economics, I would want to kind of wait and see how it kind of plays out over the next six months.

Thank you and all the best. Yeah.

Thank you. Next in line, we have Aejas Lakhani.

Aejas, kindly unmute and ask your question.

Yeah. Hi, Karan.

Congrats on the numbers. Karan, just one question.

I wanted to understand the yield that your net new inflows typically have. Oh,

again, Aejas, depends on the kind of net flows. Obviously, if it's pure advisory, then obviously it will be in the region of 30 to 35 basis points.

If it's discretionary, will be 45 to 50. If it's pure distribution, would be 60 to 70 basis points.

Okay. Since you're dealing with very large clients here, is there any element that, probably it's a little more subsidized upfront and then it sort of builds out, or there's nothing of that as

I think relationships definitely built out. I think, needless to say, like in most businesses, I think at a starting point, we're always facing a little bit of competitive pressure, but that competitive pressure eases out as the relationship kind of goes deeper.

Obviously, our own ability to offer the entire platform to the client becomes larger and larger. Obviously, I think, clients end up doing a lot of work with us on the overseas platform, on the lending platform, sometimes on the banking side.

Obviously, I think the ability to kind of go deeper both vertically and horizontally with the client becomes larger and larger. Sometimes, if there are large mandates, obviously, we have to kind of be slightly flexible on the fee.

I think we've done a fairly decent job. I think at scale to build an advisory practice with this retention is not been that easy.

Because obviously, I think building out a product model is relatively sometimes easier, but scaling that is tougher. On the advisory side, the flip is obviously, I think it's tougher to build out the service model and, even tougher to charge fee.

I think you have to kind of combine both of that and obviously it has a lot of benefits because it has the ability to scale up faster.

Got it. Thanks and all the best.

Thank you.

Thank you. May I remind you, in case you have any question, kindly click on the raise hand icon.

Next in line, we have Dipanjan Ghosh. Kindly unmute and ask your question.

Hey, hi, Karan. Good evening.

A few questions from my side. First, we are obviously seeing a very strong flow number in the 360 ONE Plus segment, basically overall wealth segment, and not for this quarter specifically, but if I look at the past few quarters after the attrition-related issues kind of got sorted.

Now, I think at the start of the call, you mentioned that a lot of it had to actually do with the new teams that have been onboarded. I just wanted to get some sense of, incrementally what is the contribution of flows coming in from this large teams which you have onboarded.

Because we have aspirations of scaling up the RM franchise and the client franchise to that 9,000, 10,000 levels, do you expect the contribution from new clients or new wallets to actually be a relatively higher portion of your flows in the wealth segment compared to, let's say, what you used to see on a run rate basis? That's the first question.

The second is on the core transactional revenues, which is ex of BNK. I think on that part of the business, despite being a relatively weak and volatile quarter, you're still kind of clocking around that 140, 150 crores, which historically used to be towards the upper end of your guidance of 100, 150 crores per quarter, just from the core part.

Now, in terms of the pipeline on the TBR side, do you see any large transactions, like last quarter you mentioned there was some high-yielding debt-related transactions. Do you see any large transactions in the pipeline over the next, let's say, three to nine months, be it on the real asset side or on the private credit or, something out there?

Two data-keeping questions. I think a query on the cost part.

Is there around a 12 to 13 crore of exceptional cost that is sitting out in this quarter, because if I look at your wealth overall expense, it's around 354 crore, but in the presentation, you have mentioned that your operating PBT excluding some exceptional cost items in that case, the cost is 342 crores. This difference of 12, 13 crores, is it some initial payouts to acquire some teams or build up the IB business?

Those were my questions. I have a small question which I can ask at the end,

yeah. Yeah.

I'll start off with the color of with the color of flows. I think that's a great question, and to be honest, I think, what gives us the highest amount of encouragement is that we're seeing the the the color of flows really do well at the absolute base level unit level, which is number of clients.

I think, honestly, for us, that's the that's the acid test, and I think what what gives me the most amount of excitement is if I just go back maybe 36 months back, the number of clients with more than 10 crores with us would be a number somewhere in the 1,800, 1,900, 2,000 kind of number. That number obviously today is, just just above that 4,000 kind of number.

That's the biggest opportunity. I think eventually that that's what really adds the AUM, because if this 4,000 becomes 8,000 to 10,000, because most of these clients at 10, 20 crores would would be maybe 15%, 20% wallet share with us.

Obviously, what happens is the ability for us to as a full-fledged wealth platform, the ability to really seep in and kind of increase our wallet share is the highest. The ability to really kind of canvas these clients from from from 4,000 to 5,000 to 6,000 to 8,000 is going to be one defining big number for us from a wallet share perspective.

If I was to specifically look at last three, four quarters, I think it's kind of the same. It's, a, I would say number of clients; b, obviously, a slightly higher wallet share or slightly higher market share at the point of at the point of the client having a liquidity event; and thirdly, I think our own ability together with the help of all our relationship managers, the advisory team, and as well as the product team to be able to kind of increase our wallet share with the client as time goes by.

I think the third one is really, really important, because most of the clients we end up dealing with eventually end up with two or 2.5 advisors. I I like to call it 2.5 because the two advisors the client is dealing with on a day-to-day basis, and another half advisor is always kind of lurking around.

Initially, most advisors start most clients start with four, four four to sometimes even five advisors. Our ability to really be part of that two as opposed to, kind of starting as one out of the four or five is really what is being very, very distinguishing.

I would say it's going to be a combination of both. At the base level, we have to have the right number of families.

As we scale up, I think we have to ensure that we have the right quantum of wallet share. The transaction question is also great.

I think, to be honest, we've been trying to improve that over a large period of time. We've we've come off from a place of having a lot of kind of lumpy transactions, sometimes on the fixed income side, sometimes on the private equity side.

With the with the co-investment regulations in place and our ability to raise raise money even in the AIF, PMS, and in the CIV vehicle, for for co-investment for stand-alone transactions, it really kind of gives us a better vehicle to be able to collect long-term money even for single instruments rather than going out and doing syndication in those kind of transactions. That necessarily means a lot of those assets will get converted to ARR assets rather than come in in the form of transaction brokerage assets.

Obviously, it reduces the upfront revenue, but from a business perspective, adds a lot of a lot of good color over the next 5, 10 years, because allows us to be able to potentially charge a fee as well as charge carry over a longer period of over a longer period of time. I think just the inherent ability to to develop to develop to have individually large transactions on the TBR side is becoming lower and lower.

I think if I was to look back over the last four quarters, maybe we had one transaction like this in Q4 last year, but going forward, these lumpy transactions will become lower and lower. We've at the same time worked very hard, like you rightly said, to ensure that while our transaction brokerage income doesn't have lumpy transactions, yet from a number perspective doesn't change dramatically.

I think we've we've worked hard to try and kind of get it to a consistent 125, 150 crores number, with the hope and ability to potentially increase it by, a modest 10% to 15%, as you go along over the next two to three years. In in that regard, actually, I think the biggest line items to look at in that sense obviously will be a function will be our own ability to do to do two or three things.

One, obviously, I think we've built the equity brokerage franchise substantially better than what we had built earlier. I think together with BNK, together with our ultra-high-net-worth brokerage practice, today it's safe to say, round about I think give or take some number between 23 to 25 crores a month, effectively 75 crores a quarter of equity brokerage on the listed side is something which we can definitely look at.

Obviously, this number can go down plus/minus 10% depending on the on the markets. It has no lumpy nature where, that 300, 325 crores becomes becomes zero.

It can go down plus/minus 5%, 10%, or it can go up plus plus 10%, but it definitely doesn't have that kind of lumpy nature. With the integration of the BNK research into into our into our high-net-worth fold, we are fairly confident of being able to make this one of the highest growing kind of segment line items within the transaction within the TBR business.

I think just given the size of our business, at 325 crores, this broadly represents less than 7% to 8% of our revenues. For any wealth business across the world, there are always clients who like to buy stocks directly.

I I I would like to believe this should be round about 10% to 15% of our revenues as we go along. Overall, TBR will continue to be still be below the 25% number, but this this should definitely see an increase from 8% to 10% to 12% to 15%.

Then obviously, you got brokerage on fixed income, brokerage on unlisted equity, brokerage on fixed brokerage a little bit of brokerage on real estate, insurance, and finally, you'll have a little bit of income on the on the merchant banking side. I think all these three things, all these four things put together should end up somewhere in that ballpark number of 125, 150, 160 crores a quarter.

Hopefully, we can kind of keep pushing that up by organically by 15% to 20% a year. In in that sense, as the as the overall ARR AUM grows at a slightly higher clip than the TBR revenue, the TBR revenue stays in that zip code of 15% to 20%, 25%, maybe 20% of overall revenues, without actually without actually increasing dramatically in absolute terms, but definitely increasing in terms of quality.

The last the Yeah, the last the last point on exceptional cost, I think that 12, 13 crores is exceptional cost is just related to ESOPs relative to the acquisition. That's that's that's the reason it's kind of put out there.

That's really in some senses not necessarily, kind of on a on a on a constant basis, but it's related to the BNK acquisition. That's about it.

Got it. Karan, just one small question.

Historically you mentioned that the carry will stabilize around that 4 to 6 basis points of recurring yields on a more structural basis. Even if you look at for this quarter, it seems a little bit towards the higher end or maybe a little bit higher than the higher end of the guidance.

In terms of visibility at least for the fiscal year '27 or '28, how do you see that shaping up?

I think it still is around 4 basis points is the right number to look at. I think just if I look at the entire alternates AUM, we are approximately at 58,000, 59,000 crores, or just let's round it off to 60,000 crores for lack of a better word.

I think 60,000 crores into round about 4 basis points, 240-odd crores for the year is broadly what I would look at. Sanjay, are the numbers right?

Correct. Yeah.

Overall impact is about 4 basis points in this quarter.

3 to 5 basis points is really what you can look at, yeah.

Of alternates, really

AIF. Yes, absolutely.

Okay. Thank you, Karan and the team, and all the best.

Thank you.

Thank you. In case you have any questions, I request you kindly click on the raise hand icon.

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

Hi, team. Thanks for the opportunity and congrats on a good quarter.

Just wanted to understand three things. One, could you give some color on the trajectory that you're seeing on HNI, and how much of the distribution AUM growth is coming from HNI flows?

You also mentioned about ECM mandates sort of becoming meaningful. If you could give some color around how that is shaping up and how that team build-up is coming in and how much of that TBR revenue is coming from ECM and how should we think of that going forward?

The third one was on the synergies alluded to from the BNK acquisition, if you could give some quantification and some color on the nature of those synergies. Those were my three questions.

Thank you. No.

On the HNI side, as I said earlier, I think that's a portion which from a new initiatives perspective seems to have stabilized the most. I think good early shoots in terms of both the stability of the platform as well as the stability of the team.

I think just looking at the team itself, out of the 60 relationship managers, we've been able to grow distribution assets from a measly number of 500, 600 crores all the way to 4,000 crores last year. The 4,000 crores now grown to round about 5,100, 5,200 crores.

Needless to say, like we've discussed earlier, the revenue recognition of all of these assets start with a 12-month lag. For the last quarter, finally, we've started kind of accruing revenue for the assets we had kind of moved in the same quarter last year.

Round about 7 to 8 crores of trail revenue has started. We are also now fairly confident of the platform and system where we have round about 4,000, I would say, not ideal clients who can be substantially serviced better, who in our system are between the 1 to 9-crore number.

Today, potentially, they contribute round about 17,000, 18,000 crores of AUM, but a relatively small revenue number of 10 to 15 crores a quarter. Those accounts can definitely be serviced substantially better.

Very soon over the course of next three-odd months, we'll kind of migrate those set of clients to the HNI team. Doesn't require a very large employee migration, less than 10 to 12 people from the ultra-high-net-worth side to the high-net-worth side.

I honestly see the high-net-worth side business really kind of taking full shape towards this financial year. It will kind of, in some senses, really serve the purpose of us kind of getting in and addressing the right set of clients between the 2 to 10-crore client between the 10 to 50-crore client segment extremely quickly.

On the ECM side, still in early days. As I said earlier, we've kind of got a good set of six people, four four people on the coverage side and a couple of more strategic important people both on the process compliance side who joined us.

Some of them are serving notice periods, some of them have already joined us. I think we will definitely start pitching for ECM mandates in a very, very active way, starting somewhere in October to December or potentially from January next year.

Having said that, obviously, we have the distribution strength as well as promoter connects in a lot of mandates, you'll already see us in a lot of mandates. Those are really, in some senses, connects and relationships and our distribution capability, which is already there in some of those relationships.

I think it's fair to say somewhere between October to December, we will be a full-strength team on the ECM side, and potentially from January next year, hopefully, we can have a certain target number in mind to kind of attach to that business. Currently, obviously, as I said earlier, it's a very, very small business.

I think revenue from that business for the last quarter would be less than 8-odd crores. In that sense, it's not really kind of meaningfully contributing to the transaction and brokerage side.

Over a period of two to three years, if the transaction brokerage revenue number was to be somewhere between the 750 to 1,000 crores, I would expect 15-odd percent, 15% to 20% to come out of the ECM side. On the synergies with BNK, I think, as I discussed earlier, I think the biggest synergy in the immediate short term is on the equity brokerage side.

I think both the platforms put together at the point of coming together were doing round about 250, 260 crores of listed equity brokerage. I think today that number is already close to give or take 310, 320.

I think that's the number I honestly see kind of increasing potentially at a healthy clip of 15% to 20% every year for the next two to three years, with our ability to kind of match our wealth management clients together with the right set of research, I think, will kind of lead to its own kind of expansion. Obviously, on the wealth management side, we have a lot of promoter connects and people we manage money for, and the ability to kind of connect them at the right point of time to the ECM banking team and research team on the BNK side will also be helpful from a synergy perspective.

Thanks. This is very clear.

Just a small follow-up. Assuming that the broad retention range that you alluded on the distribution side of 60 to 70 bps will be pretty much the case for HNI AUM also once the revenue starts kicking in, is that a fair

HNI would be higher. HNI obviously would be higher.

I think on the ultra-HNI side, everything has a slab-wise structure. I think if you look at the lower slab, everything is at round about 90 to 100 basis points and goes all the way down to 60 basis points.

I think even today on the ultra-HNI side, our distribution would be slightly higher. It'll be 71, 72, 73 basis points.

On the pure HNI side, I think it'll be closer to 85, 90 basis points.

That's helpful. Thank you.

Thank you.

Thank you. Next in line, we have Abhijeet Sakhare.

Abhijeet, kindly unmute and ask your question. Thank you.

Hey, am I audible?

Hi, Abhijeet. Yes, you're audible.

Hey,

hi. Hi, Karan.

First one is a data question. The new SARs that have been announced, is there a cost component that is built into the current quarter numbers?

For the current SARs which is announced?

Yeah.

No, that will only start at the point of next quarter, right, once it's approved and allotted. That is approximately 12 lakh SARs, 12 lakhs would be approximately 130, 140-odd crores into 40, 60-odd crores.

It will be round about 60-odd crores spread over three years, yeah.

Got it.

Spread over four years, yeah.

Going back to your comment on cost-to-income ratio, looks like we are kind of indicating somewhere close to 49% to 50% sort of full-year cost-to-income ratio. Just wanted to get that number.

That's the desire, yes.

Understood. Just from a cost point of view again, Karan, during periods when we have fairly elevated transactional revenues or carry revenues, when we kind of use some of these revenues to build out and spend towards the teams, is it more of a variable nature or do they actually sit as more permanent type of costs?

Because while the environment is favorable for the last few years, but

It's a great question. It's a constant debate which I have with the team.

I can give you three kinds of answers, but I'll give you one. No, honestly, I think the industry both on the wealth management side and asset management side is relatively quite competitive.

I think what kind of really makes it kind of take its own time and moves it to the 24, 30-month cycle as opposed to a 12, 18-month cycle is the GBs and JBs, right? Typically anybody kind of coming into the system or exiting from the system has some bonuses which he's leaving behind and potentially has built a book in the current organization, which is potentially worth something.

As he's changing the organization, he's going to take some time to build that book. I think that kind of adds a bit to the cost-to-income.

Otherwise, I think it's fairly well-measured and I think it's a good equilibrium, honestly, between all stakeholders. I think from an industry perspective, we've not really seen a dramatic change over the last two, three years.

Obviously, I think once you're hiring people, a little bit their equilibrium changes because of the time period taken to kind of reach that book back again. Got that.

Last question is just this goal to double the ultra-HNI client base, is there a in terms of where most of that incremental flows will sit in the wealth book, should we assume that advisory would be the place where most of that gets added to, or it would get spread across?

It's a little bit of the starting point of clients. I would say today to get a client starting with more than 250 crores not on the advisory side is less than three out of 10 or less than two out of 10, okay.

I think it's fair to say 70% or 80% of the clients above 250 crores would be on the advisory side. I would say if it's 50 to 250 or 100 to 250, it would become a 50/50 kind of number.

If the number is somewhere between starting off with a 10 to 50-crore check, it might be, still might be a little bit more skewed towards the distribution side.

Assuming that we would have captured the top of the pyramid, incrementally the mix in terms of advisory to distribution, should we assume it's more distribution-led or it's

No, more advisory-led. More advisory-led on the ultra-high-net-worth side.

I think safe to say it would be 60/40. The only caveat I have is the ability to use the full platform with advisory clients is substantially higher.

For a distribution client to set up a trust with you, to do gift city investments, to borrow from you, to do equity brokerage from you, the cross-selling and the cross-pollination of the platform for an advisory client would be 3x of that of a distribution client. While the headline retention looks lower on the advisory side, I think we did this exercise once.

I haven't done it for a couple of maybe two, three quarters, but actually the overall retention between an advisory client and distribution client are not dramatically different, because he's much more engaged with the platform. His ability to do multiple things with the platform is substantially higher than that of a distribution client.

Got it. That is super helpful.

Thank you so much.

Thank you. Next in line, we have Prakhar Sharma.

Prakhar, kindly unmute and ask your question.

Thank you and, Karan, congratulations to you and the team on a good set of numbers. First thing I just wanted to ask with you, now that you have this partnership with UBS quite well set, is there an opportunity for 360 ONE to market the FCNR(B)-related products on these lines, especially when you have some of the smaller banks offering very attractive IRRs, but don't have relationships on the leveraging side?

Is that a product that 360 ONE can do?

Obviously, don't want to comment on individual products which UBS is doing, but overall, I don't think UBS has still launched a FCNR program, at least in my knowledge. From a 360 ONE perspective, obviously, we are absolutely open architecture, and we're helping our clients on the advisory side.

In some senses, we've kind of worked with at least eight or 10 prime lenders as well as eight or 10 bankers to ensure that our clients are able to access the FCNR(B) platform on the right side. We continuously work with clients, and I think we will end up building out and doing a large number of trades for FCNR(B), not necessarily with us as a bank or us as a lender, but us acting as an advisor on an open architecture basis.

All right. The other one is a slightly tricky question, but I'll still take a shot at it.

Karan, over the last couple of months, there have been a lot of murmurs about when Bain as an investor steps back, you as the CEO might also take a back seat. You have been very active with all the acquisitions, integrations that you're running, but if you won't mind to share how you think yourself from a three to five-year perspective running 360 ONE, a lot of us would love to hear your thoughts around it.

Thank you.

No, I'll surely take a crack at it, and I should start off by telling you it's not a very tricky question. I've answered it at least 125 times.

It's not that tricky. I actually answered it first in 2008, three months after starting the company.

I've been answering it for 18 years. No, very quickly, I think obviously, my longevity or my desire to continue as CEO of the firm has nothing and nothing at all to do with Bain equity shareholding.

Both of those things are not linked in any way, manner, and form. I think so that's the first thing.

Number two, obviously, our own ability to continue as CEO of the business is a function of two or three things. Obviously, it's my own desire to kind of do what I'm doing, what I like, and what I'm passionate about, which is I think safe to say for the last 25 years pretty much this is what I'm doing.

I continue to be equally excited about And second, obviously, age and health has to support, and fortunately, I'm all of 49 and hopefully have a long, long, long time to go. Third, I think, as long as all other things continue to be equal, I think today it is fair to say mentally and emotionally we are all 85%, 90%, 95%, 100% invested in the business, and financially more than 90% invested in the business.

I think that's really where it is. Baki, as things go by, there's no real definition of three years, five years, seven years, 10 years.

I think whatever it is is what we take. Typically, I like to look at things on a continuous basis.

Today, if you ask me, there's nothing really at all which is really even making me think differently from what I'm doing today.

Perfect, and thank you for sharing the details. Best of luck.

Thank you.

Thank you. Thank you.

Thank you, Karan, for taking all these questions, and this brings us to the end of the earnings call. Thank you, ladies and gentlemen, for joining us.

Have a pleasant evening.

Thank you.