HDFC Asset Management Company (HDFCAMC) Q4 19/20 earnings summary

Executive summary

• FY 19-20 PAT rose 35.66% YoY to ₹1,262.41 crore; closing AUM fell 7% to ₹3.19 lakh crore amid the March market decline, while quarterly average AUM grew 8% to ₹3.70 lakh crore.

• Market shares were 14.3% of total closing AUM, 14.7% of actively managed equity-oriented AUM and 15.0% of individual AUM; 56 lakh unique investors and 94 lakh live accounts.

• Operations remained functional through lockdown using remote work and digital channels; cloud infrastructure was expanded and digital services maintained transaction continuity.

Financial highlights

• Revenue from operations rose 4.60% to ₹2,003.25 crore; total income increased 2.22% to ₹2,143.43 crore in FY 19-20.

• Operating profit increased 26.80% to ₹1,512.87 crore; PBT rose 20.25% to ₹1,653.05 crore and PAT grew 35.66% to ₹1,262.41 crore.

• Investment management fees grew 3.69% to ₹1,965.28 crore; portfolio management and advisory fees increased to ₹37.97 crore from ₹19.79 crore.

• Other income declined 22.81% to ₹140.18 crore, including a non-recurring ₹120.36 crore unrealised fair-value loss on secured NCDs.

• Adjusted for SEBI's October 2018 expense rule change, scheme commissions and expenses shifted to schemes; FY 19-20 fees and commission expense fell 91.31% to ₹20.89 crore.

Outlook and guidance

• Growth opportunity rests on domestic savings and investment needs, brand strength, diversified products, distribution reach and digital customer acquisition; priorities include expanding products, distribution and digital capabilities.

• Management expected mutual funds to remain relevant to household savings and emphasized deepening mutual-fund penetration and improving customer experience through technology.

• Industry commentary projected Indian GDP contraction of ~6% in FY 20-21 and growth above 7% in FY 21-22, assuming 12 months of normal activity; long-term growth normalization was expected from FY 22-23.