HDFC AMC reports decent performance on toplineHDFCAMC - 1912 Change: 19.20 (1.01 %)
News: HDFC AMC's AUM saw muted growth of 0.2% QoQ to Rs.436700 crore (7.4% YoY), mainly led by ~1.5% QoQ rise in equity AUM to Rs.196700 crore, and now forms 46.9% of overall AUM. However, debt AUM witnessed a decline by 4% QoQ to Rs.152400 crore, now forming 34.9% of total AUM. HDFC AMC continued to witness decline in market share from 12.4% in Q1FY22 to 11.9% in Q2FY22 and further to 11.6% in Q3FY22. Total income from operations increased 1.4% QoQ to Rs.550 crore. This led to flattish numbers in revenue to closing AUM at ~50 bps. Other income increased sequentially to Rs.86 crore vs. Rs.66 crore in Q2FY22. PAT has increased 4.5% QoQ to Rs.360 crore, led by an increase in other income.
Views: In our view, HDFC AMC reported modest numbers, with yields largely remaining flattish sequentially. The company also plans to launch ETFs with many ETFs already in pipeline but the recent trends suggests that new fund offerings are coming with lower profitability as pricing pressure persist in the industry. Also, some dilution in margins has been observed in some schemes. Also, the continued decline in market share is a concern that persists over past few quarters. Hence, we remain neutral on the stock