HDFC AMC Gains 6% in the Week Leading to June Quarter Earnings

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
  • Home
  • Views On News
  • Jul 17, 2021 - HDFC AMC Gains 6% in the Week Leading to June Quarter Earnings

HDFC AMC Gains 6% in the Week Leading to June Quarter Earnings

Jul 17, 2021

HDFC Asset Management Company on Friday posted a profit after tax (PAT) of Rs 3.5 bn in the April-June quarter of 2021.

The bottomline rose 14% compared with Rs 3 bn reported in the same period a year ago. The rise in bottomline was largely due to higher income.

Its revenue from operations rose 23% to Rs 5.1 bn in June 2021 from Rs 4.1 bn in June 2020. Overall revenues increased 24% at Rs 6.1 bn.

Revenues increased due to an increase in AUM, as well as more remunerative mix with higher percentage of equity AUM.

Gross profit from core asset management business rose 21% at Rs 3.7 bn compared with Rs 3 bn in the year ago period.

--- Advertisement ---
Why Bill Gates, Warren Buffett and Jeff Bezos are Pumping Millions of Dollars Here

If Bill Gates, Warren Buffett and Jeff Bezos are investing millions of dollars into something, then you know it's a BIG opportunity.

Yes, an exorbitant sum of money is being pumped into the electric vehicle ecosystem by the world's elite and smart investors.

In the next ten years alone, the segment is expected to see a whopping 15x growth.

In Equitymaster's latest secret research project, we have uncovered a hidden way to ride this massive 15x EV opportunity.

All you have to do is click the link below to know how to get your hands on our research findings:

Just click here to get full details...
------------------------------

HDFC AMC also announced dividend of Rs 34 per share.

Here's a table comparing HDFC AMC's financials on key parameters.

Financial Snapshot

(Rs m) Q1FY22 Q1FY21 Q4FY21 YoY (%) QoQ (%)
Revenue 5,071 4,115 5,029 23.20% 0.80%
Total Expenses 1,419 1,109 1,226 27.90% 15.80%
Profit before tax 4,661 3,804 4,230 22.50% 10.20%
Tax 1,207 780 1,069 54.70% 12.80%
Profit after tax 3,455 3,024 3,161 14.30% 9.30%
Data Source: Company Filings

Drop in market share

The market share of the fund house fell to 12% from 14%.

HDFC AMC's quarterly average assets under management (AUM) were up 17% in June quarter at Rs 41.7 bn against Rs 35.6 bn logged in same period last year.

The average equity AUMs in the quarter under review were up 33% at Rs 17.2 bn.

Debt fund increased to Rs 15.7 bn.

Inflows through systematic investment (SIP) was up 2% year on year (YoY) at Rs 9.8 bn. However, it was lower when compared to Rs 10.4 bn in March 2021 quarter.

As of June 2021, the company has cash reserves of Rs 51.3 bn.

Discover Now: One Stock for Potentially Life-changing Gains

Highlights from the conference call

During the quarter, the company launched an asset allocation fund of fund (FOF), which saw healthy response.

HDFC AMC's performance improved during quarter ended June 2021 as compared to corresponding quarter in 2020.

However, the company incurred additional business promotion expenses. Since such scheme related expenses are accounted for in the books of the scheme, they're resulting in lower management fees to the company.

It also saw some dilution in margin due to reduction in total expense ratio in some equity schemes due to increase in the size.

HDFC AMC remains as the preferred choice of individual investors leading with a market share of 13.5%. ICICI Prudential has the second spot with 12.7% share.

Unique Investors - HDFC AMC vs Industry

Indian mutual fund industry's growth prospects

HDFC AMC's Chairman Deepak Parekh said India's mutual fund (MF) industry has the potential to grow exponentially as the country's MF penetration levels remain considerably low compared to large economies.

Parekh lauded the market regulator's new framework on aligning interest of key employees with unit holders of the mutual funds scheme.

In April, the regulator asked asset management companies (AMCs) to pay at least 20% of gross salary of key employees in the form of the units of the scheme managed by them.

Track: Stocks Recently Bought by Mutual Funds for FREE

The new rule covers all key employees who have been defined as heads of various functions and all employees who are involved in the fund management process fund managers, research teams and dealers, among others.

Overall, the mutual fund industry's AUM rose by 41% YoY to close at Rs 31.4 lakh crore.

Over the past five years, the industry's AUM has seen a compound annual growth rate (CAGR) of 20.6%, and equity-oriented AUM has increased at a CAGR of 25%.

Despite the high growth, Parekh said India's mutual fund AUM to GDP ratio remains significantly low at 15% as compared to global average of 75%.

Out of the 44 AMCs in India, the top 10 control around 80% of the AUM. Only three are listed so far HDFC AMC, Nippon Life India AMC, and UTI AMC.

Competition in the MF space is set to get intense as biggies like Zerodha, Bajaj Finserv, Samir Arora's Helios Capital Management, and Rakesh Jhunjhunwala's Alchemy Capital have applied for licenses from the market regulator.

Institutional holdings in HDFC AMC

It's interesting to note that institutional investors have a fair amount of stake in HDFC AMC.

HDFC is currently the largest shareholder with 53% stake. With 21% and 4.1% of the shares outstanding respectively, Aberdeen PLC (Standard Life) and Life Insurance Corp (LIC) are the second and third largest shareholders.

Foreign portfolio investors (FPIs) hold 9.14% stake in the company while general public has a 13% stake.

How the markets reacted to HDFC AMC's earnings

On Friday, HDFC AMC share price ended on a flat note.

It opened at Rs 3,121 on the BSE and went on to touch an intraday high of Rs 3,289, rising over 4%.

Gains were erased as the session progressed as the stock ended at Rs 3,089, up 0.1%.

Shares of the company have been on an uptrend recently. The company's shares rose for a fifth straight session on Friday.

Over the last one year, the stock is up 26% as compared to a 46% gain in NSE Nifty and a 54.8% gain in the Nifty Financial Services index.

At the current price of Rs 3,089, the company commands a marketcap of Rs 658.2 bn.

About HDFC AMC

HDFC AMC is an investment manager to HDFC mutual fund. The company has a diversified asset class mix across equity and fixed income/others.

Promoted by HDFC in 1999, Standard Life Investments (SLI) acquired 26% stake in HDFC AMC in 2001, and now the company operates as a joint venture between HDFC and SLI.

Through organic growth and acquisitions, such as Zurich India and Morgan Stanley MF, the firm has grown to one of the top two AMCs in India.

In fact, HDFC AMC has been the largest AMC in India in terms of equity-oriented AUM since the last quarter of financial year 2011.

It also has a countrywide network of branches along with a diversified distribution network comprising banks, independent financial advisors and national distributors.

To know more about the company, you can check out HDFC AMC company fact sheet and HDFC AMC quarterly results.

You can also compare HDFC AMC with its peers.

HDFC AMC vs Nippon Life AMC

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Equitymaster requests your view! Post a comment on "HDFC AMC Gains 6% in the Week Leading to June Quarter Earnings". Click here!

  

More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

Let's Talk About ETFs: What is it? Why is it Important?

A growing number of investors are using ETFs to build diversified portfolios. Maybe you should consider it too.

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

How to Find Your Next 10-Bagger in this Market (Profit Hunter)

Nov 19, 2021

The #1 make or break factor in your portfolio you shouldn't ignore.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

HDFC AMC SHARE PRICE


Dec 2, 2021 (Close)

TRACK HDFC AMC

  • Track your investment in HDFC AMC with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

HDFC AMC - SHRIRAM ASSE COMPARISON

COMPARE HDFC AMC WITH

MARKET STATS