HDFC AMC Earnings Call Highlights Q1 FY22

Q1 FY22 Financial Highlights: HDFC AMC Stock Price

• Hdfc Amc share price has shown improved performance in this quarter as compared to corresponding quarter in previous financial year

• Operating profit for the quarter increased by 21% to Rs.3,652 mn for Q1FY22 as compared to Rs.3,006 mn for Q1FY21.

• Profit before tax increased by 23% to Rs.4,661 mn for Q1FY22 as compared to Rs.3,804 mn for Q1FY21.

• Profit after tax increased by 14% to Rs.3,454 mn for Q1FY22 as compared to Rs.3,024 mn for Q1FY21.

• Operating for the quarter is down by 4% to Rs.3,652 mn for Q1FY22 as compared to Rs.3,802 mn for Q1FY21.

• Both OP margin and PAT margin are higher as compared to last quarter

• The operating margin now stands at 35 basis points in the quarter ended June 30, as compared to 34 basis points in the first quarter of the previous financial year.

• Revenue from operations increased due to increase in equity AUM

• At the same time, expenses have gone by 16%. This is on account of additional business promotion expenses that the Hdfc Amc value research has incurred during the quarter

• Hdfc Amc company grants ESOPs to certain employees and pro-rata expenditure is included in employee benefit expenses. Also, management expects these costs to come down in the coming years as the ESOPS gets vested in 3 tranches.

Growth Numbers: HDFC AMC Analysis

• QAAUM (Quarterly Average Assets Under Management) increased to Rs.4,169 bn as on Jun 21 compared to QAAUM of Rs.3,562 bn as on Jun 20 that represents a YoY growth of 17.4%

• Quarterly Average AUM of actively managed equity oriented funds has grown by 33% YoY and that of debt has shown a huge growth of 58%.

• On a closing AUM basis, share of equity oriented funds has continually increased from 39.4% in Q1FY21 to 43.0% in Q4FY21 to 44.5% in this quarter.

• HDFC AMC stock market closed the year with an AUM of Rs.4,187 bn which translates to 17% YoY growth. On a QAAUM basis also, it grew at 17% and market share stood at 12.6%

• Hdfc share price india 57.9% of AUM comes from individual investors versus 53.8% for industry and continues to enjoy the highest Hdfc Amc share Price history in individual AUM at 13.5%

• Empaneled distribution partners had increased to 70,000+ in this quarter compared to 65,000+ in the previous quarter.

Strategy:

• Hdfc Amc stock chart ran a campaign called Nurture Nature on June 21 and committed to plant a tree for every new SIP that got registered in the equity category. It got huge interest across the country.

• It has come up with new NFOs during the last quarter – HDFC Banking & Financial Services Fund and HDFC Asset Allocator FoF and have raised more than Rs.2,000 Cr together through NFO.

• AMC is looking at adding some more funds in its product basket. They have some index funds, ETFs, sectoral funds, index funds and international funds in the pipeline and would also be launching a multicap fund in the future. First one in the pipeline in Equal Weight Nifty Fund

• Hdfc Amc fundamental analysis launches a new product only if they find sustainability and longevity in it.

• Funds managed by some newer fund managers are gaining traction and currently managing more than 15% of the company's AUM.

• With the shift happening from active to passive management and markets becoming more efficient, there will always be a pressure on margins of the company

• Currently, the fund's entire revenue comes from mutual fund products. They would look at expanding its business to PMS (Portfolio Management Services) and AIF (Alternate Investment Funds)

• HDFC AMC analyst reports  bigger focus at least in the near term will continue to remain on the mutual fund side.

• On the digital front, they are aiming at enhancing investor experience which is quite evident as number of electronic transactions have increased to 85% in Q1FY22 compared to 69% in FY 20

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