360 ONE WAM Q2 profit falls 4.4% to Rs 302 crore

reported a 4.4 percent year-on-year drop in profit to Rs 302 crore for the second quarter, driven by valuation losses. Operating profit rose 20 percent to Rs 434 crore on the back of strong recurring fee growth. What happened Revenue from operations increased 17.5 percent to Rs 896 crore. Annual recurring revenue fees grew 27.5 percent to Rs 706 crore, supported by record net flows of Rs 12,482 crore. However, reported profit fell because of a mark-to-market loss of Rs 110 to 120 crore on NSE-linked investments held through its own funds, alongside a 9 percent decline in transaction and brokerage revenue. Why it matters The headline profit drop masks strong core operational momentum. Recurring revenue now forms the foundation of the business, and assets under management in annual recurring revenue grew 19.7 percent to Rs 3.53 lakh crore. While non-operating losses dragged down reported net profit, steady client inflows and strong wealth management growth show that core customer demand remains intact. Analytical view The earnings quality requires careful scrutiny. Retention improved to 79 basis points, but the lift came from lumpy carried interest rather than rising baseline fees. Furthermore, asset management growth slowed to 9 percent, and the tangible return on equity of 16.9 percent remains below the 20 percent target. At current valuations, the stock trades at around 25 times estimated FY28 earnings, which prices in steady execution. What to watch next Watch for the rollout of the capital markets platform by April, contribution from investment banking in the next financial year, and progress on reducing the cost-to-income ratio toward the 46 to 47 percent target.