HDFC AMC Q2 result update!
Last updated: 23 Oct, 2020 | 04:19 pm
- Profit supported by other income: HDFC Asset Management Company (AMC) has reported a 8% on-year fall in net profit to \u20b9338.06 crore for the quarter ended September 30, 2020. The bottomline was aided by a one-off gain in other income of \u20b956 crore from Essel NCD exposure, leading to a 122% yearly rise in other income to \u20b9117 crore. The company had posted a net profit of \u20b9368.24 crore in the same period a year ago. Revenue from operations stood at \u20b9456.3 crore, down 8.6% on a yearly basis but up 10.9% on a sequential basis.
- Muted AUM (Assets Under Management) numbers: HDFC AMC's total AUM fell 3.2% on a yearly basis to \u20b93,54,400 crore mainly on account of decline in Liquid Funds AUM. Equity AUM declined 12.8% on-year to \u20b91.44 lakh crore whereas Non-equity AUM grew 4.6% to \u20b92.01 lakh crore, with inflow in debt AUM offsetting outflow in liquid schemes.
- Decline in Market share: Even though the company remains the industry leader, it witnessed a decline in market share from 14.5% in Q2FY20 to 13.6% in Q2FY21. Equity AUM market share also declined from 14.5% in Q2FY20 to 14.1% in Q2FY21.
- Diversification in style: The company said that focus is on diversification of investment style in equity segment and the aim is to have at least 4-6 styles to create a differentiated approach over a period of time. Two fund managers of different styles have been hired and it plans to add one or two more managers.
After a muted performance in Q1 due to the effects of the Covid-19 on the markets, results in this quarter have shown some improvement as markets have stabilised and recovered. Overall, the Q2 numbers show mixed performance with improvement in some fronts while lagging on others. Contraction of AUM market share continued because of increased competition and market uncertainty, remaining as one of the top concerns for the company. The company is relying on the launch of new products and the introduction of the festival offers to accelerate AUM growth in the near term.