HDFC Asset Management Company (HDFCAMC) Q4 18/19 earnings summary

Executive summary

• FY19 AUM rose 17.8% YoY to ₹3,43,938 crore; market share increased to 14.5%, restoring the leading position by total AUM.

• PAT grew 30.83% to ₹930.60 crore, while operating profit from the core asset-management business rose 26.22% to ₹1,193.10 crore.

• Individual investors represented 63.0% of monthly average AUM; 53 lakh unique investors held 91 lakh live accounts.

Financial highlights

• Revenue from operations increased 9.02% to ₹1,915.18 crore; total revenue rose 12.14% to ₹2,096.78 crore.

• PBT increased 29.91% to ₹1,374.70 crore; PAT rose 30.83% to ₹930.60 crore.

• Other income climbed 60.71% to ₹181.60 crore, mainly on higher investment interest and dividends; it also included reversals of prior-year expense provisions.

• Fees and commission expenses declined 26.52% to ₹240.26 crore; from Oct. 22, 2018, most scheme-related expenses and distributor commissions shifted to mutual fund schemes under SEBI rules.

• A ₹40 crore expected-credit-loss provision on an investment assessed as credit-impaired was recorded; this weighed on reported profit.

Outlook and guidance

• Priorities include maintaining investment performance against benchmarks, widening distribution and investor education, developing customer-focused products, and investing in digital platforms.

• Management viewed low mutual-fund penetration, rising financial savings and SIP participation as long-term growth opportunities; no numerical company guidance was stated.

• RBI’s subdued inflation and moderating growth could allow further easing, but rate actions were expected to remain data-dependent and the easing cycle shallow.