Q1 2025 Nippon Life India Asset Management Ltd Earnings Call Transcript
Key Points
- Nippon Life India Asset Management Ltd (BOM:540767) achieved a profit after tax of INR3.32 billion and its highest-ever quarterly operating profit of INR3.08 billion in Q1 FY25.
- The company's mutual fund quarterly average AUM grew 12% quarter on quarter and 54% year on year to reach INR4.84 trillion.
- SIP contributions for the quarter increased to INR625 billion, up 45% year on year and 9% quarter on quarter, with monthly SIP flows in June '24 reaching an all-time high of INR213 billion.
- The company saw a market share increase of 24 basis points quarter on quarter and 93 basis points year on year to 8.20%, marking the fifth consecutive quarter of market share growth.
- Nippon Life India Asset Management Ltd (BOM:540767) continues to be one of the largest ETF players with an AUM of INR1.3 trillion and a market share of 17.8%, which increased by 108 basis points quarter on quarter.
- There was a noted compression in yield due to telescopic pricing as AUM grows, with a 1-basis-point contraction in the yield on a quarter-on-quarter basis.
- Employee costs increased significantly due to fresh ESOPs granted, higher increments, and increased provision for variable pay, leading to a notable rise in expenses.
- The company has opted to stay out of launching sectoral and thematic funds, which may limit its participation in current market trends where other AMCs are mobilizing funds.
- The company is facing pressure on yields due to the need to pass on lower distribution costs to customers as AUM grows.
- There is a potential risk associated with the new asset class mentioned in the consultation paper, and the company is cautious about launching products in this category.
Ladies and gentlemen, good day, and welcome to Nippon Life India Asset Management Limited Q1 FY25 earnings conference call hosted by Batlivala & Karani Securities India Private Limited. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Swarnabh Mukherjee from Batlivala & Karani Securities India Private Limited. Thank you, and over to you, sir.
Thank you, Steve. Good evening, ladies and gentlemen. On behalf of Batlivala & Karani Securities, I welcome you all the Q1 FY 2025 earnings conference call of Nippon Life India Asset Management Limited. Today, we have with us Mr. Sandeep Sikka, Executive Director and CEO, along with the top management team of Nippon Life India Asset Management with him.
I would now like to hand the conference over to Mr. Sikka for his opening remarks. Over to you, sir.
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