Nippon Life India Asset Management (NAM-INDIA) Q4 18/19 earnings summary

Executive summary

• Total AUM was ₹4.22 lakh crore at Mar 31, 2019; retail assets reached ₹89,911 crore, up 23% YoY, and folios grew 12% to ~91 lakh.

• Consolidated FY19 profit rose 7% to ₹486.09 crore despite lower revenue; digital contribution to overall business increased to 38% from 16%.

Financial highlights

• Consolidated revenue was ₹1,649.92 crore vs ₹1,748.62 crore; management fees were ₹1,446.43 crore and PMS/advisory fees ₹32.21 crore.

• Consolidated total expenses fell 13% to ₹949.68 crore; fee and commission expenses decreased 17% to ₹258.29 crore, while employee expenses rose 14% to ₹293.49 crore.

• Consolidated profit before tax was ₹700.24 crore vs ₹655.60 crore; profit attributable after non-controlling interests was ₹486.09 crore vs ₹455.74 crore.

• Consolidated basic EPS was ₹7.94 vs ₹7.63; standalone profit was ₹475.17 crore vs ₹447.57 crore, with basic EPS of ₹7.77 vs ₹7.49.

• Consolidated operating cash flow was ₹386.06 crore vs ₹375.96 crore; cash and cash equivalents closed at ₹30.03 crore vs ₹37.41 crore.

Outlook and guidance

• Growth priorities: expand retail and B-30 reach, broaden products, improve operating efficiency, investor education and customer service, with continued emphasis on profitable growth.

• The Indian mutual fund market was viewed as underpenetrated; favorable demographics, financialization of savings, awareness and rising SIP flows were cited as growth drivers.

• RBI forecast FY20 GDP growth of 7.2%; recovery drivers included private capex, double-digit bank credit growth, rate cuts and support for rural incomes.