Release Date: July 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- HDFC Asset Management Co Ltd (NSE:HDFCAMC, Financial) reported a 22% year-on-year increase in AUM, reaching INR74.4 trillion as of June 2025.
- Equity-oriented AUM crossed INR43 trillion, marking a 21% increase over the same period.
- The company added 0.5 million unique customers during the quarter, contributing to a 25% penetration of mutual fund investors in the country.
- Revenue from operations grew by 25% year-on-year to INR9,678 million, with other income increasing by 34% year-on-year.
- Profit after tax grew to INR7,480 million, a growth of 24% year-on-year, with a stable operating profit margin of 36 basis points of AUM.
Negative Points
- The yield expansion was not as significant as anticipated, with equity yields remaining broadly in line with the previous quarter.
- The cost implications of the new ESOP and PSU plans are expected to result in a non-cash charge of about INR56 crore in FY26, impacting future expenses.
- HDFC Bank's contribution to overall and equity AUM has declined in percentage terms, despite absolute growth.
- There is a concern about higher lump sum redemptions affecting the closing equity AUM, which increased by only 12.5% on a QoQ basis.
- The sequential increase in other operating expenses, partly due to the timing of CSR expenditure, raised concerns about cost management.
Q & A Highlights
Q: Can you share the indicative yields across equity, debt, liquid, and ETF segments, and explain the yield expansion this quarter?
A: The equity yields for the quarter were around 58-59 basis points, debt was between 27-28 basis points, and liquid was between 12-13 basis points. Overall, the blended yield was 46 basis points, which is consistent with previous quarters. There wasn't a significant expansion in yields. - Naozad Sirwalla, CFO
Q: What are the cost implications of the ESOP and PSU plans announced recently?
A: The new ESOP and PSU plans will result in a non-cash charge of approximately INR 205-210 crore over the vesting period. The estimated impact for FY26 is about INR 56 crore. This is seen as a long-term investment in talent retention. - Naozad Sirwalla, CFO and Navneet Munot, CEO
Q: Could you provide an update on the new asset class and team setup?
A: We have received SEBI approval to set up a specialized investment fund. The team is focused on designing offerings that align with our investment strengths and risk management capabilities. We aim to serve as a comprehensive investment platform. - Navneet Munot, CEO
Q: What is the outlook on debt and liquid funds, and are there new products in the pipeline?
A: The outlook for debt markets is favorable due to improved liquidity and interest rate reductions. We have a comprehensive product range and continue to promote debt funds. Recent flows in debt and liquid categories have been strong. - Navneet Munot, CEO
Q: How is the growth in the passive segment, and what is the strategy for launching new funds?
A: We have expanded our product offerings in both index funds and ETFs, including market cap-based indices and thematic funds. Our strategy is to maintain a diversified product suite and gain scale in each category. - Navneet Munot, CEO
Q: Can you explain the sequential increase in operating expenses?
A: The increase in operating expenses is primarily due to the timing of CSR expenditures. This is a significant factor in the sequential rise. - Naozad Sirwalla, CFO
Q: Are there any trends in net inflow market share, particularly in SIPs?
A: Our market share in SIPs has increased, and we continue to see strong interest from investors. The overall trend in net inflows is encouraging, with a healthy market share across channels. - Navneet Munot, CEO
Q: How do you manage asset allocation across different funds for customers?
A: We do not manage asset allocation for customers unless it's within an asset allocation product. Our focus is on long-term strategic asset allocation rather than reacting to market moves. - Navneet Munot, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
