HDFC AMC sees flat profit growth in Q4

Fund house held sizeable market share in individual investors’ segment

HDFC Asset Management Company (AMC) — the country’s second-largest asset manager — reported profit before tax (PBT) of ~425 crore in the March quarter, a marginal year-on-year improvement of 0.13 per cent.

After adjusting for nonrecurring items — which entails investments on the company’s books — PBT was down 20 per cent (on a YOY basis) at ~329 crore.

For the previous financial year, the fund house saw its PBT rise 25 per cent to ~1,773 crore. However, after adjusting for the impact of nonrecurring items, PBT was 20 per cent higher at ~1,653 crore.

The company had a market share of 15 per cent in the individual monthly average assets under management category. Overall, the AMC’S market share in the industry stood at 13.7 per cent, with quarterly average asset base of ~3.69 trillion.

Compared to the industry’s equity-debt asset mix of 38:62, the fund house’s asset mix stood at 37:63.

Net profit for

FY20 stood at ~1,352 crore, a 41 per cent jump. This needs to be seen in light of a cut in corporation tax rates introduced by the government in September 2019. After the non-recurring items, the net profit for FY20 was 36 per cent higher at ~1,262 crore.

For the March quarter, net profit was 13 per cent higher without accounting for the impact of nonrecurring items. Quarterly net profit is down 9 per cent, after accounting for this impact. The AMC also offered dividend per share of ~28.

The firm had a market share of 15% the individual monthly average assets under management category. Overall, the AMC’S market share in the industry stood at 13.7%