HDFC AMC results: Profit drops 3%, market share declines


Profit decline marginally: HDFC Asset Management Company (AMC) has reported a 2.58% on-year fall in net profit to Rs 359.75 crore for the quarter ended December 31, 2021. In Q3FY21, the AMC reported Rs 369.26 crore.

Increase in revenue: The revenue from operations increased by 14% YoY to Rs 549.67 crore in the December quarter. Profit before tax increased marginally from Rs 482.60 crore (Q3FY21) to Rs 485 crore in Q3FY22.  

Operating profits from the core asset management business increased by 8% despite an additional non-cash of Rs 17.32 crore towards the amortized cost of outstanding employee stock options. Operating margin.

HDFC AMC results: Highlights

Increase in AUM (Assets Under Management) numbers: HDFC AMC's total AUM increased 7% on a yearly basis to Rs 4.37 lakh crore from Rs 4.068 lakh crore in Q3FY21. Equity AUM declined 11.4% on-year to ₹1.967 lakh crore. 59% of the company’s total monthly average AUM is contributed by individual investors compared to 55% for the industry. 

Decline in Market share: The market share declined to 11.6% market share in the AUM of the mutual fund industry.

New product launched: The company launched two new products in Q3FY22 - an actively managed multi-cap fund (AUM of Rs 4350 crore as of 31st December 2021) and NIFTY Next 50 Index Fund (AUM of Rs 310 crore as of 31st December 2021).

HDFC AMC results: Review

While the revenue and EBITDA have come in below estimates, HDFC AMC was able to meet estimates on the bottomline. HDFC AMC's AUM saw muted growth of 0.2% on-quarter in AUM. The mutual fund industry is extremely competitive. HDFC AMC has a strong brand franchise, distribution strength and operational capabilities. However, continued competitive pressure & passive products would limit the yield expansion. Further, the company’s continued decline in market share remains a concern. ICICI Securities has a ‘Hold’ rating on the stock with a target price of Rs 2,550. HDFC AMC shares hit a 52-week low of Rs 2,170 this afternoon.