Release Date: January 14, 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 39% year-on-year growth in revenue from operations, reaching INR9,343 million.
- The company's operating profit for the quarter increased by 51% year-on-year, amounting to INR7,472 million.
- HDFC Asset Management Co Ltd maintained a strong market share of 11.5% in the industry, with equity-oriented funds comprising 65% of their assets under management.
- The company opened 25 new offices, primarily in B30 cities, to expand its presence and cater to a broader customer base.
- Digital transactions have significantly increased, with 95% of transactions now processed digitally, up from 69% in FY20.
Negative Points
- The company's other income was impacted by falling equity markets, affecting their 'skin in the game' investments.
- There was a minor decline in the equity market share, attributed to both market performance and changes in flows.
- The systematic investment plan (SIP) closure to opening ratio has been increasing, indicating potential slowing momentum.
- The company faced challenges in winning the EPFO tender, missing out on a significant investor segment.
- There is uncertainty regarding the impact of new regulatory changes on the company's operations and market strategies.
Q & A Highlights
Q: The SIP data shows an increasing closure to opening ratio. Is this an indicator of a slowdown?
A: The closure to opening ratio should be viewed in the context of gross flows and redemptions. While there might be fluctuations, the overall growth in SIP AUM is significant, indicating healthy gross flows. (Respondent: Unidentified_4)
Q: Has there been any change in distributor payouts this quarter?
A: No incremental changes were made in distributor payouts this quarter. A rationalization was done on August 1, 2024, but it was a one-time exercise. (Respondent: Unidentified_2)
Q: What is the strategy for thematic funds, given their significant contribution to net inflows?
A: While we have been conservative, we have launched successful thematic funds like the manufacturing fund. We aim to maintain a balanced approach, ensuring products align with investor needs. (Respondent: Unidentified_4)
Q: How do you view the potential for growth through HDFC Bank's distribution channel?
A: There is tremendous potential with HDFC Bank, which has over 100 million customers. We are deepening our engagement and expanding our presence to leverage this distribution channel. (Respondent: Unidentified_4)
Q: Are there any plans to launch new products under the SEBI-approved new categories?
A: We are waiting for the final set of regulations. Our team is working on creating products that align with these new categories, aiming to capture market share once regulations are finalized. (Respondent: Unidentified_4)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
