360 One Wam Ltd (NSE: 360ONE) Q3 2025 Earnings Call dated Jan. 27, 2025
Corporate Participants:
Sanjay Wadhwa — Chief Financial Officer
Anshuman Maheshwary — Chief Operating Officer
Karan Bhagat — Managing Director & CEO
Anil Mascarenhas — Senior Executive VP, Communications
Analysts:
Mohit Mangal — Analyst
Prayesh Jain — Analyst
Jayant Kharote — Analyst
Sandeep Jain — Analyst
Dipanjan Ghosh — Analyst
Devrat Mohta — Analyst
Sanket Godha — Analyst
Bhuvanesh Garg
Presentation:
Operator
Good evening, ladies, and gentlemen and welcome to 360 ONE WAM’s Q3 FY25 Earnings Call. As a reminder, all participant lines will be in listen only mode. There will be an opportunity for you to ask questions after the management shares their thoughts. Should you require assistance during the conference, kindly signal the host by tapping on the Raise Hand icon. Please note this conference is being recorded. On the call today we have with us Mr. Karan Bhagat, Managing Director & CEO, Mr. Anshuman Maheshwary, Chief Operating Officer and Mr. Sanjay Wadhwa, Chief Financial Officer.
I now hand it over to Sanjay to take this conference ahead. Thank you.
Sanjay Wadhwa — Chief Financial Officer
Thank you Anil and a very good evening to everybody on the call today. Starting with the Macros as we know Indian equities after outperforming for most of the calendar year 24 witnessed some volatility over the last couple of months.
Even with expectations of a marginal slowdown in the near term growth, the broad economic outlook remains stable and amongst the best within the developed and emerging economies. Looking through the short term volatility, we continue to remain bullish about India’s long term growth story which will act as a tailwind for India’s wealth and asset management sector supported by faster wealth creation outside traditional pockets and overall low penetration. Coming to the business and financial numbers in Q3 our total ARR in AUM increased to 248,000 crores up 33% year on year.
This growth was supported by strong net flows at 6,643 crores up 12% year on year. With this overall nine months, FY25 flows more than doubled to 21,979 crores and as against nine months of FY24, our wealth Arrum stood at 1.62,749 crores up 39% YoY while the AMC Arrood at 85,250 crores up 23% YoY.
Wealth ARR net flow stood at 5,940 crores up 24% while AMC net flows were at 703 crores. However, the gross flows were at approximately 3,000 crores. For the quarter, AMC AUM saw a marginal reduction on a QOQ basis due to negative mtm. The impact was minimal as a diversified asset base and strong gross flows provided cushion against market correction. The negative MTM in listed equity was nearly offset by positive momentum in the PE and customized multi asset segments. Our ARR revenues for the quarter group by 26.2%
Yoyo at 426 crores. Led by growth in assets across business segments and healthy retentions. Our ARR revenues as a percentage of total revenue from operations stood at 70.4%.
As a strategy, we continue to focus on increasing the share of ARR revenue in the overall pie. Our overall ARR retentions stood at 70 basis points with Wealth ARR retentions at 73 basis points and Asset Management retentions at 65 basis points. Total revenue from operations was up 38% year on year at 605 crores.
For Q3 FY25 total costs stood at 319 crores for the quarter. Employee costs were at 240 crores while other costs were at 79 crores. Our cost to income ratio stood at 47.1% for the quarter and it’s 44.3% for nine months. Our operating profit grew by 37% year on year at 286 crores. Once again we are happy to report our highest ever quarterly PAT in Q3. PAT rose by 41.7% to 275 crores with tangible ROE at 24.1%.
We expect the ROE to improve as the full business impact of the deployment of QIP proceeds start to flow over the next three to four quarters. With that I would like to hand it over to Anshuman to cover the key business and strategic highlights.
Anshuman Maheshwary — Chief Operating Officer
Thanks Sanjay and good evening everyone. At the outset let me reiterate we are extremely excited by the strong business performance of Q3 and 9 months FY25. The last 4 to 5 quarters have been very interesting for the industry and for us both in terms of business trends and equity markets. It’s further reinforced the resilience of our business to market uncertainties and the benefit and the financial stability of having a very strong recurring revenue base.
The growth in the industry continues at a rapid p+ace. I think the shift towards professional wealth management, particularly advisory services continues and it highlights our clients increasing recognition of the benefits of professional portfolio management in mitigating biases and enhancing performance. Nearly 50% of our wealth ARR net flows in the nine months FY 25% 25 have been contributed by 361 plus our advisory proposition.
Additionally, alternates spanning private equity, venture credit real assets continue to grow as a key avenue for portfolio diversification and superior returns. Again a segment where we are sharply focused and are one of the market leaders. On the asset management side we continue to see strong gross flows across strategies.
The planned distributions on our early stage, on our initial late Stage funds is nearly complete, should be completed in the next couple of quarters and that’ll kind of bring out the impact the connectivity on cross flows and net flows. Our presence across diversified asset classes again on the asset management side adds flexibility and strength to the client portfolios as well as our financial performance across market cycles. A quick update on our new strategic initiatives over the last quarter we’ve strengthened our HNI platform.
We are onboarding clients as a part of the soft launch that’s been going on. The team build out is very well underway and we are on track for the full launch starting April. We are very excited by getting this out into the market in a big way.
The global platform is also coming along well. Our EAM tie ups are in place and we continue to engage with clients on a selective basis, testing the overall proposition and making refinements to it based on client inputs and experiences. Finally, on ET Money, the regulatory approvals related to the transaction have been received over the last few months.
As we were waiting to consummate the transaction, we’ve been thinking through the strategic agenda going deep into areas of synergies, growth monetization and we are excited to consummate the transaction over the next week to 10 days and take the business forward along with the money leadership. 361’s commitment to quality innovation and a client centric approach solidifies our position as a leader in the wealth management and alternate space driving responsible and sustainable growth in this rapidly transforming market. Throughout our journey we have consistently evaluated new opportunities which can add strategic values to our stakeholders, which is clients and our shareholders.
Our key endeavor has always been to cater to our clients first with the most comprehensive platform and the best possible proposition. In line with this vision, we are very excited to announce the proposed acquisition of BNK securities and BNK Finserve. As a lot of you will know, BNK is one of the most established and leading mid cap brokerage houses in the country with a legacy of over 100 odd years.
It has a very strong business on the institutional equity side with a large cross section of DIIs and FIIs being a part of their operations being a part of its client portfolio. It also has a strong corporate treasuries business with more than 600 corporate clients and a 75% share of recurring revenues. In that particular segment the team is extremely strong.
You know we have a team of about 275/people, 55 to 60/focus research analysts. Very clearly a team that has been rated top quartile by its key clients and recognized for governance, culture and client centricity, values and elements that are very critical to us as 361. In addition to institutional equities and corporate treasury, there is to set up the pillars for establishing and building out an equity capital markets business.
So that’s a recently launched business segment offering merchant banking services to a select group of clients and the team expansion in BNK is underway to offer full fledged ECM capabilities to domestic institutional clients as well as its treasury clients. We are extremely excited by the synergies that this business offers across both leveraging our current business to expand on the BNK business offerings as well as leverage the BNK relationships and specifically the BNK research on the mid cap and small cap side for our clients and for our businesses. Karan will of course speak about synergies and how we seize it even you know Further two or three things to I think highlight about the transaction itself.
We are very excited that the team and the leadership continues and will move into 361. The leadership and the team are committed and very excited by the potential that this offers and the transaction structure, if you all had a look at it, actually captures the optimism and the excitement on what can be created together over the next five to seven years. Specifically just sharing a little bit of detail on the transaction structure itself.
It’s a combination of upfront cash as well as stock issuance to the promoters. The deal consideration is 1884 crores which is inclusive of about 200 crores of cash or cash equivalents that is in the entities. The deal is structured such that there is a cash payout of 710 crores and then there is 1 crore equity shares of 361 VAM at 1174 per share that will get issued.
This share again has a lock in of five years with 20% pro rata basis for each year. We have in place a long term employment and retention plan as well for the leadership and team members which again comprises both of ESOPs as well as cash payouts linked to financial targets. The plan and the retention plan is in place for a period of next six years again clearly highlighting the long term optimism that we have on what can be created basis.
The 9 months FY25 earnings we see the deal consideration at about 70 to 18 times its trailing P and about 13 to 15 times the forward P. Again we are very excited that the transaction is eps accredive from day one and over the next once a transaction consummates over FY26 and 27 specifically with synergies we see significant EPS accretive opportunities coming from the transaction. Before I hand it over to Karan, just want to highlight two or three other things.
One, on the ESG front, Krishil has assigned a strong rating to 361. The score that we’ve got is one of the highest among wealth and asset managers in India and it’s reaffirming our strong commitment to the long term ESG practices that we’ve been undertaking. And secondly, we are very proud to be recognized as the best private bank India by Asian Private Bankers Awards for distinction in 2024.
We understand it’s a marquee award and we’ve won it many times over the last few years and we continue to be very proud recipients of this award. So with that I’ll open it up and request Karan to come in and share his thoughts on the business as well as on the transaction.
Karan Bhagat — Managing Director & CEO
Thank you Sanjay. Thank you Anshuman. Good evening everyone. And I’ll take two or three minutes to just talk about the the two businesses, wealth and asset management and potentially another couple of minutes on on our acquisition of BNK securities and then we’ll open up the floor for question and answers.
So I think over the last quarter pretty much, you know, like we’ve seen over the last six to nine months, I think the level of activity both on the, on the wealth management business as well as the asset management business continued to be quite strong. Obviously I think a little bit of tiredness with clients, especially on investing on the equity side generally as a firm we’ve been a little conservative on the on new incremental allocation to mid caps and single stock ideas. I think clients are today more or less sitting with a little bit of liquidity, hoping and anticipating and having the ability to invest over the next three to six months.
So overall I think while we remain fairly optimistic about the market, I think most of our clients are extremely well set and have a fairly large inclination towards having a portion of the portfolio in fixed income and continuing to invest with the right set of opportunities over the next six to 12 months. On the business structure side, on the wealth management side, I think the mantra for all large clients continues to be more on the advisory side. There’s a whole breed of new clients who are focused on on the orientation of building up a family office but looking out for bespoke players like us to provide them the right set of advice and opportunities where they can transact and match their asset allocation together with their complex needs in terms of tax structuring as well as other ideas in terms of geographical expansion.
I think that effort continues I think still a tough, tough job to get the right, right talent matched in every location. But I think we’ve come a long way over the last 12 to 18 months and today we have the ability to identify one or two people in each of these locations who are able to carry the, the brand 361 to clients in an effective manner. On the asset management side, our competitive positioning on the alternates continues to be fairly strong.
We managed to close our, we closed our new special opportunities, funded a total of five odd thousand crores, a very, very good number. Performance for all the last five funds has been stellar. SOF 9, 10, 11 and 12, all the last four versions are continued to run at IRRs in excess of 25, 30, 40%.
And I think our ability to attract clients on a repeat basis to these strategies continues to be strong. We also started sector focused private equity funds especially in the space of financial services, Healthcare, tech, financial services, tech, consumer and healthcare. These four is where we are starting out.
Our financial Services Fund, the first round which we did two years back is running at an IR of 40, 45%. So very, very upbeat on that. And we’ve just launched our first healthcare fund which will close around about 100 odd million.
So on the alternate side I think the space on both of private equity as well as yield continues to be fairly strong. We still continue to be largely financial investors as opposed to being operators on the alternate asset side. So while the net flows look a little muted, it’s, it’s, it’s still a function of the thousand crores of net outflows which we have from the, from the earlier investments getting over.
But overall the gross flows continue to be fairly, fairly exciting. On the listed side of the business. We continue to maintain our, you know, maintain a fairly healthy mix in terms of retentions and the right set of clients.
We are optimistic as time goes by again over this, this, over this next six odd months we’re sure out of the institutional mandates we’ve been covering, we’ll definitely cover or convert one or two and over a period of next 12 to 18 months, even though the sales cycle for some of these mandates are long, we continue to be very well engaged with some of these institutions to enable the right set of net flows to come in on the, on the supplement business. On the wealth management side, obviously I think equity brokerage per se has been one of the businesses where we’ve potentially not fired to the full extent. I think our equity Brokerage revenue numbers have been around about 60 to 70 odd crores over the last three to four years coming largely from our ultra high net worth and high net worth clients.
While we don’t plan to change that, most of these large clients of ours were trading maybe potentially with other brokers and competitors and we really didn’t have the right research product. So the first thing really this acquisition BNK securities does for us for the, for the existing business of 361 is very, very strongly adds a research product to the entire platform and most importantly creates a very very powerful flywheel of offerings to deliver exceptional value for our clients. And like some of the large global, global private banks, especially for clients who are above $500 million, it ensures that we have the full flywheel of being able to cover all aspects of offering to our clients.
Whether it’s on the, whether it’s on the lending side, whether it’s on the, on the equity side, banking side and most importantly on the wealth management side, the corporate treasury business. Again a business which we’ve not kind of traditionally focused on but a fairly sticky business. BNK has built it extremely well.
More than close to around about 50,000 crores of AUM with a very steady flow of around about 40 to 50 crores of annual trail revenue. On the mutual fund side the strategic acquisition is kind of poised and we like it for four or five primary reasons and I’ll kind of spend two or three quick minutes on that. The first and most important reason is it gives us expanded research leadership.
The coverage of stocks ranges from 450 to 500 stocks with a specialized focus on DIS. As Anshuman says, one of the top quartile rated analyst teams in the country. But most importantly for us it’s a very aligned culture and expertise.
We’ve had the opportunity to spend a lot of time with the team and pretty much like us, they’re very, very focused spend a lot of time on ensuring that they deliver the right value to the client. And there’s a 247 penchant on ensuring that all queries, all, all, all, all, all things concerning the client are addressed absolutely immediately. I think the SAIS built the business and transformed it over the last 45 years and most importantly the transact him to continue over the next five years with a large part of his consideration vested back into the 361 stock.
Obviously with the addition of a little bit of enhanced capital and balance sheet, our ability to attract and serve a wider institutional client base under the ages of 361 will also get, will also get enhanced for us at 361. Obviously it allows us to fill the missing gap with cutting edge research and strong investment banking footprint. But most importantly it also gives us much more deeper engagement with our promoter families and helps us serve them across the entire cap table on the corporate treasury side Also this existing relationships, as we supplement and add our wealth management platform and the fixed income desk to these set of clients, we believe we’ll be able to be able to monetize these clients substantially better as opposed to the 40 to 45 crores of, of treasury income which is of treasury mutual fund income which is currently being generated by these set of clients.
For us this acquisition marks a significant milestone and ensures that we will be able to create a flywheel of offerings to deliver exceptional value to our clients. So overall you know, a fairly, fairly robust quarter. While capital markets obviously over the last 15 to 20 days have been slightly soft overall for us, I think netflows have continued to be strong and both on both the businesses wealth and asset management.
We continue to be extremely excited over the next 12 to 18 months. With that I’ll open it up for you for questions. Thank you.
Questions and Answers:
Anil Mascarenhas
Thank you. In case you wish to ask a question, request you to tap on the raise hand icon question line. We have Mohit Mangal. Kindly unmute yourself and ask your question.
Mohit Mangal
Yeah, I’m audible.
Karan Bhagat
Yeah Mohit, you’re audible.
Mohit Mangal
Yeah, yeah. Congratulations on a good set of numbers. So first on this acquisition, I mean if I look at last two to three years, you know we have acquired ET Money, Mumbai Angels and now bnk.
So, so just wanted to know, I mean I understand that you know that they supplement the wealth management business but do your focus is is building on a holistic financial services company and maybe it would no surprise that you know that you would continue with such big acquisitions.
Karan Bhagat
So I think as I said earlier, I think we have to complete the platform of offerings to the clients. And I think if I was to look back over the last 24 to 36 months, this was a missing link, especially both on the research and the capital market side.
If I was to look at our client offerings, we were potentially missing that gap. We were leaving a gap open for our competitors to get in and in a lot of cases some of our competitors were able to use that to kind of enter into the relationship at the same point of time. We have phenomenal promoter connects and not being able to take advantage of those connects and ensure that we’re able to Build a deeper relationship with the client.
One of the best points to build a relationship with the client is obviously at the point of him kind of raising some capital. So I think that’s something which we are missing from a focus perspective. Obviously I think it’s not something which we can today, you know, just given the specialization on each business.
It’s not something which we can build absolutely ground up from day zero. And I think that would consume a lot of, a lot of our own management time and bandwidth. So it’s very important for us to be, you know, for, for any of these acquisitions to work.
It’s very important find the right team on the ground. Not only the right team but also the right product in terms of research. And thirdly and most importantly both in terms of culture, alignment, retention and the ability to work together for the long term have to come through.
And I think only these three things can fall in place. It can have a multiplier effect. So you know, while acquisitions can, can or cannot work out.
But I’m quite, quite, quite confident on this largely because of the amount of time we’ve been able to spend with each other and understand each other’s business. So while 361 remained super sharp razor focused on the, on the wealth and the asset management side, I think I can say the same thing for BNK on the, on the equity side. And therefore I think as long as there’s a cultural fit, I think the, the sharp focus and the right time for management allocation between the three businesses will continue.
Mohit Mangal
Understood. So do you have anything more in the pipeline currently?
Karan Bhagat
No, not really.
Mohit Mangal
Okay. Now coming to business our three major questions. So first is on other income. So markets were down but if I look the number you that was up both sequentially as well as annually. So what could be the reason for that?
Karan Bhagat
My other income for us to on the listed exposures round about, only if I’m not wrong around about 260, 280 crores. Our large exposure is to fixed income and unlisted equity. So a little bit of the, a larger part of the uptick typically has happened on the unlisted equity side and we have a couple of, couple of investments in yield instruments which kind of get got converted to kind of listed invits and listed REITs.
So if you look at our alternate exposure around about 1800 odd crores which forms the bulk of our other income. I think less than 14, 15% is in listed equity. The remaining 80, 85% is really in yield assets or late stage private equity.
Mohit Mangal
Understood you know in terms of net flows I think we were good at around 20 to 23,000 odd crores and maybe the guidance for 25 30,000 for the entire year would be met. So do you have targets in terms of financial year 26?
Karan Bhagat
Honestly Mohit, I think we could have done slightly better on net flows to be honest for the year I think you know, while our target was 25:30 I think we should have been closer to 2025 just given the kind of year it was. But, but I think you know honestly would want to keep that track of being able to have around about 10 to 12% of, of AUM added through net flows.
So if you to next year including the mark to market and stuff like that, the 25 30,000 would need to equate to around about the 30 to 36,000, 35 to 40,000 number to be able to kind of match the 10%. Because to get to the 2022 25% AUM growth we need to do the 10 to 12% AUM growth on the new base and obviously 10 odd percent, 8 to 10% can happen through or maybe 10 odd percent through mark to market over a period of time. So the only way to get to the 2022, 23% AUM growth is to ensure we get a 10% AUM growth on the, on, on the opening biz.
Mohit Mangal
Right? No, makes sense. Lastly, in terms of attrition, RM or client, you know, over the last nine months did you see anything unusual or was it, was it business as usual?
Karan Bhagat
No, we’ve seen a little bit of an incremental attrition in our north, on the north side of our business on the wealth management side. So a couple of leadership changes we had to make which we, we had to make more, more driven out of, of our modern, out of our own business priorities and that kind six or seven wealth managers moving out of our Delhi office.
So that’s the only place where we’ve seen incremental attrition but well under control. I think we obviously have 130, 140 senior bankers across the country and in that sense we have four and a half, 5,000, you know, large families above 10 crores. So in terms of the ability to capacity to serve those clients is well established.
So I think from a business perspective, I think Delhi itself might see a 3 to 4% or maybe 5% maximum reduction in revenue. But at the same point of time we’ve attracted a whole host of people from other private banking platforms. And as we’ve kind of ended up adding new senior folks in our north market over the last 45 days.
I think over a period maybe by April, May, June we’ll be old team strength plus plus 10 to 15%. So I think overall I personally think north will end up at maybe you know from a revenue pool of around 160 odd crores it will end up at 40 to 50% higher over the next two to two and a half years. So I think you will see a temporary blip of 5,6% there but nothing beyond that.
From a client attrition perspective we haven’t seen any large trend yet. I think clients are pretty much still intact. Maybe three or four families will be see attrition but largely I think client wise it’s pretty much there.
I think for every team which moves out it’s a long process and I think as they onboard and kind of set up everything, I think the first right to win the client still remains with us. So I think that’s really where it is. Outside of that we haven’t really seen any crazy attrition.
But please also remember for every relationship we have at least three teams interacting with the client. They’ve got investment advisory team, we’ve got product team and we got the relationship team. So as such, you know it’s a fairly comprehensive tight setup.
Even today we’ve got, we’ve got a couple of really senior folks from Bombay Ugri located to Delhi and we’ve got the entire residual RM team plus the new relationship team there. So in that sense that’s the only thing outside of that, across all businesses it’s as business as usual. I think that’s the only geography where we’ve seen some bit of attrition.
Mohit Mangal
Understood. And then lastly in terms of, you know, RM hiring so what are the plans for financial year 26?
Karan Bhagat
I think conservative. I don’t see us hiring like crazy.
I don’t think so the business is anymore about just adding relationship managers. I think it’s about adding the right set of relationship managers and I think the industry on the wealth management side, my personal view is will consolidate a lot over the next 12 to 18 months and there has been a little bit of competitive excess in the industry over the last six to eight months and that kind of got set off a bit with a whole host of transaction income and selling of unlisted stocks and ideas and that obviously can’t continue perpetually. So I think just going out and building cost models which need to be offset with that income or other income is not really going to kind of play out over the longer term down.
So I think as a firm I think we’ll, we’ll grow steadily. I think to be honest around about 8 to 10 incremental hires in north. Outside of that we’ll still continue with the same pace of adding around about 15 to 25 bankers.
So if you ask me, I think in total next year we’ll ADD on about 20 to 25 bankers which is around about 7 to 8 more than what we would normally do which is largely a replacement hiring.
Mohit Mangal
Understood. Thanks and wish you all the best.
Karan Bhagat
Thank you.
Operator
Request you to restrict yourself to two questions. You can come back to the queue again once the questions are done.
Next in line we have Prayesh Jain. Kindly unmute yourself and ask your question.
Prayesh Jain
Hi Karan, can you hear me?
Karan Bhagat
Hi Pray, how are you?
Prayesh Jain
I’m good Karan. Just firstly on this acquisition, you know we’ve been talking about the ARR growth and you know the. We would be kind of sticking to the high share of ARR revenues in our business model. But as I understand both IE IB have a very high transactional income.
In fact they are transactional in nature completely. So that does change or alter the way we look at 361 as a whole. With respect to now the ARR versus TBR will kind of move going ahead and just on that, on that bit again you know if there is a possibility you can share us the revenue breakdown between IE IB and the treasury of BNK securities.
Karan Bhagat
No sir, I think I fully agree wifth you. I think we are very, very conscious of that split. But I think from a change in revenue mix I really don’t see too much changing just given the overall size of our ARR growth in ARR and the TBR mix.
So just, just to put things in context I think out of our overall revenues of approximately, you know, give or take 2,500 2600 crores in a year today around about 1600-1700 crores on the ARR side which is approximately 65 to 70%. And the transactional income obviously has been exceptional. Last year it’s been close to around about 700 odd crores.
But you know like, like, like I’ve said many times, I don’t think so that’s possible to sustain. I think the 700 crores in most markets would be close to 450500 odd crores, 125 crores a quarter or 130 crores a quarter. So I think this year we have 150, 175 crores of, of transaction income extra and I don’t think so that sustains in every market obviously last, last, last nine months and the 12 months before that.
The markets have been under test there. So I think honestly for me this, the, the, the brokerage revenue of BNK together with our transaction revenue more or less remains at the same amount for, for the next year now. So the current revenue transaction revenue number of 700750 maybe potentially comes down to 500550 and we add now around about 200250 crores of brokerage income from, from BNK next year.
Whereas obviously the ARR income continues to grow in a fairly studied manner at, at, at 12 to 18% every year. So you know, just at 2,800 crores and you add another 200, 250 crores of transaction revenue and reduce 150 crores of transaction revenue. And at the ARR, I think our transaction revenue will continue to be in that subset of around about 20 to 25%.
And I think all global benchmarks. Broadly speaking. Two things we would like to follow, we’d obviously like to grow our ARR revenue significantly and the two numbers I think we’ll want to track is we want to ensure our TBR income is around the 2022% range.
Our net interest margin also is around the 20% range. And the rest of the income which is your wealth management advisory income, your asset management fee income and the wealth management distribution income that accounts for around about 60% of the income. So just, just from a block perspective in terms of quality, health of earnings and health of revenues, that’s the mix we would like to see.
So around about 60% coming from fees charged to the client plus the trail earned from the manufacturers, maximum of 20% coming from net interest margin and a maximum of 20% coming from TBR. So that’s the long term plan. Obviously there will be years where this gets a little distorted.
So for example, last year just given the way the markets are, the TBR has increased a bit. But generally speaking the two numbers which we’ll want to ensure are not more than 20% in NIM and not more than 20% in TBR. On the, on the mix of revenues from a BNK perspective, out of roundabout revenue around about 250, 260 crores, nearly, nearly, nearly 80%, 80, 85% is coming from institutional equities only approximately 4 to 5% currently from investment banking and approximately another 17 18% comes from, from mutual fund distribution.
So Actually, if you see, see the mix of revenue there. Also, obviously the investment banking mandates can tend to be the most episodic and cyclical. That itself is less than 2, 2 and a half, 3% of their revenues.
Institutional equities makes up the bulk of it, which is around about 75% of the revenues. Obviously that can also have a direct linkage to the market, but it’s not as cyclical and binary as the investment banking mandates. That’s obviously a bit of a flow business, but they have a very, very strong client base both in terms of domestic mutual funds, insurance companies as well as fi.
And lastly, I think that the corporate mutual fund distribution business is obviously fairly unique. They would be, I think, among the top three players in the country. And the mutual fund trail business of 40 to 45 crores is extremely sticky.
So overall, I think if you look at the business, I think the institutional equity brokerage, I wouldn’t put it in the same cyclical bucket as much as investment banking. And overall, if I look at the pool of our own revenues, I think we’d still be around about 60, 65% ARR, 20 odd percent net interest margin and 20% transaction. Got that?
Prayesh Jain
That’s pretty helpful. Just on the core business front, you know, how has the, probably, you know, we’ve, we’ve seen almost a month now in January. How has been the customer behavior and you know, with respect to flows or anything that you can help us understand what’s happening given the sharp market corrections we have seen,
Karan Bhagat
I think very difficult to call it out. But I think generally speaking, clients are comfortable right now.
I think generally speaking, everybody. And if you see our asset allocation committee notes and all the releases we made, all the releases we made over the last six odd months, we’ve advised clients to have anywhere from 10 to 30% cash. We’ve been underweight mid caps for now, maybe more than what we should have been, maybe around about I think nine months to 15 months.
Nine months, more or less, actually nine months to 12 months. So obviously you can’t get these things right. But I think generally speaking our average client is having a lower weightage, lower allocation to mid caps and potentially sitting on 10 to 30% cash.
I think. Is there a, a frenzy and a hurry to invest that 10 to 30% cash? The answer is no. Okay.
So I think clients are still kind of looking out and waiting out for the right set of opportunities. Having said that, obviously is there a concern on the flurry of activity continuing of becoming lower? I think the markets continue to kind of head one way and there is a fair degree of volatility over the next 30 to 45, 60 days you might see the level of activity come down a bit. But overall I think most of our clients are fairly comfortable position and I think, I wouldn’t say they, they feel that this is yet the best time to kind of come in with that 10 to 30%.
Prayesh Jain
Got that. Just slipping in one more permits. How do you look at cost to income you know with this acquisition and you know whether any.
Karan Bhagat
No, nothing different at all. I think the new acquisition is also working around the same cost to income I think in the 45% to 47% zip code. So I think there’s really no change there.
I think broadly on a 240, 250 crore top line around about 105 crores of profit after tax. So give or take very, very similar, very very similar cost to income and as I said earlier, very, very similar, very similar tal very similar way to do business. So I think from a cost to income perspective really don’t see any change at all.
Prayesh Jain
Thank you and wish you all the best.
Anil Mascarenhas
Thank you. Next in line we have Nish Jain N. Kindly unmute yourself and ask your question. Nadesh, go ahead. We’ll move to the next caller. Jayan Karote J. Kindly unmute and ask your question.
Jayant Kharote
Thanks for the opportunity and congrats on the good set of numbers. Karan. Firstly on the distribution flows this quarter it’s around 40 odd billion. I see last quarter we had a pretty strong number here but bearing that one it seems this is the sort of run rate we’ve been having to sort of move.
Next year’s target of new net new money north of 30,000 crores. This number needs to move up quite meaningfully. So what do you think is lacking and what can be done?
Karan Bhagat
So I think this number will benefit a bit from our full HNI launch.To be honest I think that’s something which should spur up this number quite a bit because on the ultra high network launch obviously I think on the ultra high network side the AUMS now especially the net new flows is getting split in the very constructively in the first line instead of the second line. So I think the second line growth really comes from the HNI launch a little bit more than the first one and I think it also kind of comes in a little bit. I personally feel it’ll come on, come in a little bit more also from the alternate side eventually because right now not showing up in the numbers because we’ve had nearly I think four and a half, 5,000 crores of net outflows on the alternates because of the redemption of the earlier funds this year.
So I think those two things will help kind of the distribution assets earning trail fees, pure pure mutual funds from ultra high net worths increasing their distribution assets is extremely unlikely. I think that line is that line items getting divided between the, between the first line and the second line. So I think our hnips together with the, with the continued focus on alternates will lead to the right growth in that line item.
Jayant Kharote
Great. And just again second question following up on the alternates itself drawing into your experience here, how do you think this plays out? Let’s say this year markets are sideways. Jan is sort of a trailer over there.
How does the alternates market behave in this environment? Do you see that cash deployment first moving towards alternates or the mix doesn’t change? Really?
Karan Bhagat
Honestly I think the mix won’t change, it will change within alternates. So maybe private equity allocation is slightly lower. Yield asset allocation is slightly more.
Operating assets is slightly more. Real assets is slightly more more. If interest rates remain stable and around the same levels I think you’ll see less is becoming quite interesting.
So overall I think you know, alternatives will continue to be interesting. You know, you know you might see the launch of the small mutual fund in which case you know the entire longshore strategy will come into place. So I think in general alternatives will continue to be interesting.
I think the broader mix between private equity, credit yield assets and listed equity will keep changing. But I think there are enough ideas and enough traction for different ideas. For example, we are going to launch our next fund but it’s largely focused on multi asset.
So it’s not only focused on private equity but the first three transactions you’ve done are kind of more on the yield side as opposed to being on the equity side.
Jayant Kharote
Sorry, just one follow up on this one only alternates the gross flow number that you mentioned is that stable QoQ adjusted for the redemptions in the distribution assets in the alternates piece
Karan Bhagat
I think it’s, I think last two quarters have been better but I think I would put it in the same zip code plus minus 10% 15%
Jayant Kharote
So once the redemption cycle gets over this number should
Karan Bhagat
Start automatically start working. Yeah, we’ve had exceptional redemption this year.
Right. Because I think we started off with a 6,000 crore fund in 201718 one time fund and we’ve returned I think close to around about 12,800 odd crores, if I’m not wrong, around about 13,000 crores or slightly more. 13,500 crores of which 12,200 crores of redemptions is already there.
And we have another further 1300 crores to go.
Jayant Kharote
Great, great. Thanks.
And congrats once again for a great set of numbers.
Karan Bhagat
Thank you.
Anil Mascarenhas
Thank you.
Next in line we have Sandeep J. In.
Sandeep Jain
Yeah. Am I audible? Yes, and you’re audible. Yeah. A couple of question first on this convertible debenture, convertible warrants which we will issue to the promoter of bnk, is there any kind of timeline when it will get convert into the equity or is there any timeline, kind of blocking period and all?
Karan Bhagat
Just a normal.Just a normal warrant. 18 months and at the. At the prevailing market price.
Sandeep Jain
Yeah, at the prevailing market price, kind of. Okay. And the second, the cash payout of 200 crores which we are saying to link to achievement of financial target, it is a kind of equal with the. Every year or something like it’s a barbell kind of thing.
Karan Bhagat
No, it’s at the end of the fourth, fifth and sixth year
Sandeep Jain
And the end of fourth, fifth and sixth day.
Karan Bhagat
Yeah, but that’s this, this is. It’s his basis, certain set of numbers, achievements and so on and so forth.
Sandeep Jain
Got it. And one question in terms of, you know, in terms of acquisition strategy here.
Right. So you know, if I look at the last one or two years like in the first question it has been asked, you acquired ET Money, you acquired. This means as a, as a.
As a whole, where we are going means if I look at the BNK 85, 90% of the revenue comes from the. Largely in terms of the broking income. Income.
Right. And in terms of. We are saying the synergy in terms of acquire the corporate account or you know, kind of treasuries and all these things, you know, it doesn’t match kind of thing when we are saying that.
Karan Bhagat
Yeah. So, you know, I think. I think every, every business across the world, effectively, if you just look at all the large private banks, there are three lines of businesses.
There’s the capital market business, there’s the asset management business and the wealth management business. The other three businesses. So I think the other three business businesses and all the acquisitions and everything we’ve done is either within this business or it’s expanded the segment horizontally.
So when we go to. When you talk about ET Money or you talk about any of the acquisitions there, it’s essentially a horizontal expansion of the segment. Okay.
So we could be moving down and up the segment within the same offering. Similarly on the asset management side obviously you got alternates and mutual fund which are two different parts of the offering. And third you got the capital market space within the capital market space.
Obviously you got different segments to operate. Again I think it happens to be institutions as well as high net worth individuals and family offices. I think high net worth individuals and family offices in a certain small way already existed in our wealth management business.
The institution piece didn’t exist in our business. And I think together with BMK we’ll see how to build out the investment banking piece in the best possible way. And if you see globally also if you see the bigger let’s say you just for, just for example if you look at ubs, you look at Goldman, you look at all of these private banks, all of them would have these three businesses.
They would have wealth asset as well as the capital market business.
Sandeep Jain
Okay. No, so the point which I’m trying to make here is that when we have you know, kind of demerged from the erstwhile ifl right.
It was supposed to be a pure play wealth management gain. So Karan, I’m just don’t get me wrong but what I am trying to understand here is that in terms of getting the funnel do we need this kind of acquisition more in terms of getting the client HNI and all these things because at that point of time the, the maybe the my perception was it will be a pure play wealth management business and all this thing. So funnel is getting.
Karan Bhagat
I don’t look at it that way. Whether we want to be a pure manager. The, the first question to answer is what does the client need need and how do we complete the client’s platform Actually so I think for me honestly the first question to ask is am I able to serve the client at a 360 basis and where are we missing out From a client platform perspective that’s the most important perspective.
And honestly for me today to serve my clients especially the client was $500 million plus in net worth in terms of financial not, not necessarily in terms of financial assets but even business assets. It’s an important part of the offering setting and for us we honestly rest of the things whether we are a pure play. How does everything else has to follow.
The first thing obviously is the requirement of the client and today if I you know, I just keep using the word flywheel but when I look at the client proposition and what what we need to deliver to the clients, I think that’s a missing piece which you would like to add.
Sandeep Jain
Okay, thanks.
Karan Bhagat
Thanks.
Anil Mascarenhas
Thank you. Next in line we have Dipanjan Ghosh, kindly unmute and ask your question.
Dipanjan Ghosh
Hey. Hi Karan. I hope I’m on. Absolutely. So just a few questions first, you know, if you can give some color on the variable payouts excluding the acquisition, you know, how do you think it to be shaping up for the next year here? Obviously I’ve acquired a few teams last year, some of them would have scaled up. TBR was quite strong this year as you said that X of bnk.
Obviously this run rate may not be sustainable. So just want to get some color on how the entire scorecard based model is working out and how do you see the overall variable payouts and if you can just quantify what can be build in as ESOP expenses maybe a year out from now. And the second question is.
Sorry, yeah, please. No, no, please, please, please carry on. Yeah, so just one more question which is more on the.
You know, obviously it has got asked multiple times in the call. In terms of the client sentiment, what we see is that the number of high quality client additions during the quarter was tad lower than the run rate we have been seeing for the last two quarters. I think 60 clients got added this quarter versus a little bit more maybe in the last one or two quarters quarters.
So incrementally the markets were to remain the way they are. But on the other side you have been expanding geographically, adding new teams, the existing scheme, scaling out, the HNI proposition kind of rolling forward from April onwards. How do you see a new client addition, run rate maybe shaping up in the next year?
Karan Bhagat
Yeah, no, so I think, I think both fair questions.
I’ll start with the. Sorry, let’s just move up the first variables. Variable.
Sorry. Yeah, so the first question I think from a, from a variable and a bonus payout perspective, I think broadly this is the way we look at it. I think the current year and current years had a slightly larger, larger tinge of variable because we’ve changed the method of payout.
But largely speaking, I think approximately our current design plan for the next next financial year would be approximately 150 crores of fixed cost per quarter, which will translate to around about 600 odd crores a year. You’d see round about 40 to 50% of that express itself through variable bonuses obviously. Why I’m saying 40 to 50%.
It’s a bit of a function of the, of the way the markets are. I think obviously if things are absolutely not in the right, not in the right direction, then the number can come off to 30% but typically speaking more often than not in the region of 40 to 50%. And then you’ve an ESOP cost of approximately 100 odd crores across the, across the P and L.
So approximately you see employee cost. It, it’s in the region of at the, at the very least 9,950or crores to around about 150 odd crores. That’s really the, that’s really the employee cost.
Obviously there are certain productive efficiencies. There’ll be a salary hike and stuff like that. So I think all absorbed put together we see it between 950 to 1050.
Again obviously if we add some crazy teams, maybe a 50 crore number extra. So I think absolutely south 950 absolutely on the north side around about 1100 odd crores. So that’s the salary cost and I gave you the breakup of, of the three which is the fixed variable as well as the, as well as the, and I think these, this 1100 odd crores or 950 to 1100 crores broadly should represent approximately 34, 35 odd percent of the overall revenues of the firm.
And on the plant edition part, you know, on the client addition and net flows, I think, you know, honestly, I think as I said earlier, I think slightly lower than what I would have liked. I think flows could have been between the 27, 28 and 35 number as opposed to the 22 to 24 number. I think maybe, maybe two or three things there.
I think one, I think generally speaking last couple of, last couple of months, I think general, a little bit of, little bit of longer time taken by clients to kind of come back into financial assets, especially equities, there’s been a little bit of hesitation just given the market valuations. And secondly, I think from a, from a business perspective obviously we are coming off of, from a fairly high base base. So that’s the only thing.
But otherwise I think most of our actions on both the, both the high net worth piece together with expansion on the geography should start playing out and our initiatives on growing both, both of these will more than supplement I think a little bit of, I won’t call it lethargy but a little bit of slowness in the market. So overall I think as I said earlier, there will be a little bit of consolidation and value wealth. But I think given the fact that you know, we’ve kind of spent a lot of time building some of these things out over the last 12 to 18 months, I think even in flattish markets we may not be able to grow phenomenally, but even in flattish numbers, I think coming off a higher base we’ll still be able to maintain the high base even on things like, even on things like number of new families and net flows and so on and so forth.
I think the only metric which definitely kind of comes off a bit is the, is the transaction and brokerage revenue that obviously I think can’t necessarily sustain at the same level.
Dipanjan Ghosh
Got it. Thank you and all the best.
Karan Bhagat
Thank you.
Anil Mascarenhas
Thank you. Next in line we have Devrat Mota.
Devrat, kindly unmute and ask your question.
Devrat Mohta
Hi Karan. Firstly congratulations on a good starter.
I just have one question. I mean you know, obviously markets have been strong. You know, barring the last kind of three, four weeks, markets have been so strong.
So is there, I mean is there a risk that you’re buying BNK at kind of, you know, peak cycle? I mean for a brokering business you’re sort of on peak cycles. Is that, why do you think that’s not the case? Because I mean obviously your own transaction income has been super strong. So I presume you know, BNK also would have had a, you know, similarly very strong earnings.
And if for some reason your kind of markets come off like is there a risk that you know, you’re probably, you know, optically valuation look cheap or you know, reasonable on, on a trailing basis but if you’re on peak earnings then it might end up being that you know, you’re shipping more than what, you know what it looks like on, on the earnings.
Karan Bhagat
Right. So I think there were three points there.
I, I don’t disagree with you. I, I think but we need to just kind of counterbalance it with three things I think. First obviously while transaction and brokerage income is a fairly wide term, I think the quality of income within the transaction and brokerage income is also something which we need to kind of measure.
So obviously there’s one part of transaction income which is a one time income on selling some unlisted shares or doing a certain, doing a certain transaction. The other part of income within transaction brokerage incomes. Obviously repetitive activity coming out of a, out of a relationship and out of a broking transaction being kind of conducted on a daily basis.
I think even between the two there is a certain, certain degr of difference in terms of variability. I think in BNK specific case I think a large portion of the not large portion, practically 97, 95 to 96% of the revenues currently comes out of the second portion and not out of the first portion. So while it will be linked to the market cycle, I think the general, general variability between the two will be, will be lesser compared to any other, let’s say capital market player focused on ec.
So that’s the first thing. Second, I think obviously while doing the acquisition a lot of things have to align together. I think maybe possible that earnings come off by 10, 15% in a very worst case from our assessment.
Obviously just factoring in all the four or five synergies which we have to our business as well as the synergies we can add to the BNK business, we at least feel from a management case perspective on a stressed basis we should be able to add 30 to 40% to the earnings. So honestly I think from our perspective, the way we are looking at it synergistically, I think we should be able to make the multiple even substantially more attractive than what we’ve kind of acquired it for from a trailing basis. And thirdly, I think obviously we’ll need to kind of some of these things to acquire need a lot of stars to align in terms of both culture, in terms of, in terms of the likeliness to do, to do business together in terms of being, you know, maybe positioned as in a leadership position for both the businesses and most importantly, you know, the will and willingness to kind of build this together for the long period of time.
So I think overall and, and that obviously kind of plays into the synergies and really expresses itself extremely well over the next 24, 36, 48 months. So potentially possible at the very, very worst case if the markets really go into a total tailspin that we’ve ended up paying a little bit more. But you’re just given the synergies and where we are, I would be really surprised.
I think in most probability the answer would be no. And if at all that happens over a period of 24 to 36 months, I think both the businesses have from a culture perspective and synergies perspective to add so much that will end up being in a very, very good position. That’s really what we feel.
Devrat Mohta
Thanks A. That’s super helpful.
Karan Bhagat
Thank you.
Anil Mascarenhas
Next. Thank you. Next in line we have Abhijit Sakari.
Abhijit, kindly ask your question. Okay. Next we have Sand Goda Sanet, kindly unmute and ask your question.
Sanket Godha
Yeah, thank you for the opportunity. Current means on fully diluted basis after warrants get converted into common equity. So the dilution comes closer to 3.3 Odd percentage. That’s. That’s a fake math.
Karan Bhagat
Yeah, approximately.
Sanket Godha
Yeah. Okay. And, and and just I just wanted to ask second question means out of 2250 crores of QIP what you raised probably you will end up using 700 crores over a period of time to to consume this acquisition. So is it fair to assume that the NIM which we was expecting to improve because of QIP might might not play out to that extent? And second this just maybe I forgot to ask but how much time you will take to consume this acquisition from regulatory point of view whether it will get reflected fully in 26 or somewhere in 27?
Karan Bhagat
No sir, I think it will take around about four to six months to kind of consume in terms of transaction I think I’ve just given a historical experience. Four months is the right timeline to plan for but sometimes it can take a month or two more.
So I think at the very least I would say three months at the outside I would say six months. I think from a business perspective the way we’ve kind of set out the transaction is I think all the accumulated earnings outside of 200 crores within the BNK profit and loss account till 31 March stays out of the transaction post 31 March kind of comes into the, comes into the, into the 361 kind of. So it just adds to the net worth and reduces the consideration value.
So from that perspective may not fully reflect into the financials in 26 but definitely from a valuation perspective that’s the way it will kind of get reflected.
Sanket Godha
And on the NIM part does it impact?
Karan Bhagat
I don’t think so. NIM gets impacted much but I think you know it the 700 crores obviously we’ve got a design and plan to kind of reduce our allocation on the alternate side And I think as we build it out over the next 12 to 18 months I think our sponsor commitment remains more or less flattish and comes down towards the 141500 crores.
So I think it reduces the other income by around about 8 to 9% of the 700 crores. So in that sense it’ll have a pbt impact of 50 to 60 crores and a PAT impact of 4045 to 50 crores.
Sanket Godha
Got it. Perfect. And and just just your flows numbers which are 50900 odd crores in the current quarter. This just want to understand do, do it still have any, any component coming from HNI or global or it is predominantly pure, pure wealth yet H and I ultra H and I mean to say
Karan Bhagat
Right now predominantly ultra H and I I think the, the flow of high net worth both put together around about 8, 7800 odd cross.
So it’s not zero. It’s around about 10% of the flows but a large 10 15% of the flows. But a large portion of the flows continues to be on ultra high net worth.
I think honestly you’ll see the. We definitely expect the high net worth and global flows to show up fully in FY26 and definitely from quarter one of next year.
Sanket Godha
So the 7800 crores for the full year year potentially would would be like like a guess estimate 3x4x in.
In next year means what what you intend that number to be
Karan Bhagat
Should be at least 3x.
Sanket Godha
Yeah. Okay.
And. And last one you see last quarter we highlighted that some broker code change regulatory change helped a bit in. In.
In flows to. To improve for us. So.
So given, given the flows numbers compared to last quarter it is relatively weak. So. So.
So has it played out largely in Q2 or you expect this to flow out in subsequent quarters?
Karan Bhagat
No sir, it continues to help every quarter a little bit. I think what we were also talking about last quarter with not only the flows but also the. Well, there’s a little bit of improvement which you’ll see sequentially on the ARR side and on the mutual fund because you know after broker code change after six months the new.
The new broker starts getting the mutual fund commission. So even though the AUM starts reflecting the. The trail commission doesn’t really increase for.
For six months. So that’s. That’s something which will reflect over a little bit over the period of time.
The AUM shift after the first six months becomes pretty much business as usual because the clients have kind of moved in the first six months itself. But the revenue to come in kind of takes a little bit longer.
Sanket Godha
Okay.
But. But have you seen given. Given this rules have been changed for almost 19 months now.
So. So in third quarter did we have any revenue accretion because of broker could change? If you have a number in your mind if you remember it,
Karan Bhagat
I think there’s around about Half a bip to 1 bip overall increase in the ARR. Total increase in ARR is 2 basis points and a small bit comes from this.
Sanket Godha
So. So 25 30% contribution came because of this improvement. Delta improvement in the.
Karan Bhagat
Yes.
Sanket Godha
Okay, perfect. That’s it for myself. Thank you.
Anil Mascarenhas
Thank you. We’ll take a question from Abijit Sakari.
Abhijit, kindly unmute yourself and ask your question. I request Bhuvanesh Garak to kindly ask a question.
Bhuvanesh Garg
Yeah. Hi. Am I audible?
Karan Bhagat
Yes, yeah.
Bhuvanesh Garg
Thank you for the opportunity. Sir. Sir, two, three questions from my side. Firstly, on BNK acquisition, so just want to understand the thought process behind it.
Was there any other player that you were considering during the acquisition? And since you are saying that the, one of the objective for acquisition is that clients were getting foothold on, on capital raising side. I mean since you didn’t have the capital raising proposition for your clients, now you are, you are having it. But since the BNK has only 5% of its revenue from capital raising, part of it, IB part of it.
So just if you can just share your thoughts on this and what was the thought process?
Karan Bhagat
No, no, I think nothing really different to our fish. I’ve already kind of spent some time on it, but largely I think three portions. One obviously is ensuring that we are able to complete the flywheel with the client.
Second, on, on the, on the banking side and obviously while banking we still not built out a team within bnk. But research is a critical part or input to the product. So without having the strongest part of any, any, any franchise would need all three to come in.
It would need research as a need the promoter relationships. And thirdly, it would need access to both domestic as well as foreign institutions. I think between, between, between the two of us, we, we get all three on the table.
And secondly, I think obviously as I said earlier, it complements our high net worth brokerage offering also very well. That’s been a bit of a area of improvement for us for a long time and without having the right research product and stuff to kind of take it to the market. So good amount of ability for us to be able to increase our equity brokerage on the wealth management side.
And thirdly, on the corporate treasury sides, I think we should be able to add a lot of value and be able to monetize those corporate accounts better. And fourth, I think a little bit of additional balance sheet to the, to the brokerage business of BNK will allow them to kind of even leverage their current research team better and be able to serve some larger clients on fairly different, on different platforms and different products. So these are the four, four immediate synergies I can think of.
Bhuvanesh Garg
Okay, understood. Second thing, on the interest income side, so you mentioned that you want it to be 20% of the revenue. So is it on, is it only driven by the contribution of revenue or is there any other parameter to drive your loan book? For example, next year your transaction income say would be lower.
In that case would you, your interest book also be stable or are you looking to Grow further.
Karan Bhagat
No, it’s not like that. You know, we can’t really plan it that way.
It’s not, I think this is an output, it’s not really an input. I think so. For example, if you see our loan book typically tracks our wealth management AUM.
So our loan book typically tends to be 2 and a half, 3% of the wealth management AUM and we typically have a 3 to 4% NIM there. So effectively if you do a reverse calculation on the overall fee revenue, you end up at around about 15 to 20% of the revenue pool on the net interest margin side. So, so that broadly seem that when I say it suggests a good quality of mix of revenues, what I mean to say is that’s healthy growth because as your AUM is growing your, your loan book is also growing in the right proportion.
That’s really what I meant by, by saying net interest margin book should be around the 18 to 20%.
Bhuvanesh Garg
Okay, understood. And thirdly on your inflow side, so if you can share some data, what would be our market share in inflows in 9 month FY25 or versus FY24? If you can just share some data
Karan Bhagat
It’s really tough to calculate market share. But I think our guess estimate basis what we see with clients, I think our stock of market share would be around 9 to 10% across all, all active wealth managers. And I think if I was to look at, look at incremental market share, maybe we slightly higher, we’re in the 14 to 15% range. But honestly this is just a guessing.
This is the feeling we have versus what we see on the ground in terms of competition on the wealth management side, really tough to calculate market share on a day to day.
Bhuvanesh Garg
Yeah, that ended so incrementally means 9 month FY25 over FY25 for you.
Karan Bhagat
Yeah,
Bhuvanesh Garg
Okay, understood. And thirdly, any data on any revenue, any revenue you are getting from ET Money side and what’s the plan there on with DT Money.
Karan Bhagat
As I said earlier, we’ve not, we’ve just got approvals for ET Money like yesterday. So it’s not really kind of consolidated yet.
But broadly speaking I think ET money’s financials have improved a lot over the last last year. I think broadly speaking I think revenues have increased a bit thanks to a little bit of change in regulations as well as a little bit of change in advisory revenues. Cost has come down.
So I think the overall burn stands at half of what it was last year. And you know, as we take it over over the next week or so, we hope to kind of drive it even. Even in a more.
Even in a more optimized way.
Bhuvanesh Garg
So any plans for three year to five years perspective on ET Money?
Karan Bhagat
No. I think like all our other businesses, we hope to grow it by from a revenue perspective by 25 to 35.
And maybe since 80, money comes off a slightly smaller base, grow the profits also at 30 to 50%.
Bhuvanesh Garg
Okay, fine. Fine.
That’s it from my. Thank you for.
Karan Bhagat
Thanks Bhuvanesh.
Anil Mascarenhas
Thanks. Thank you. Thank you. Karan, apologies, that’s all we have time for this evening. Thank you for taking time to log on to our call. Have a nice evening.
Karan Bhagat
Thank you, everybody. Thanks for joining in.