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Informist, Monday, Oct. 13, 2025

 

By Priyasmita Dutta

 

NEW DELHI – HDFC Asset Management Co. Ltd. is expected to report robust growth in net profit in the September quarter, driven by strong inflows and the continuing growth in equity assets under management backed by improving fund performance. However, the lacklustre equity market performance in Jul-Sept will weigh on the bottom line sequentially.

 

HDFC AMC's net profit is expected to rise 14% on year to INR 6.59 billion, according to the average of estimates from six brokerages. However, sequentially, the net profit is expected to fall 12%. Prabhudas Lilladher Pvt. Ltd.'s estimate for net profit of INR 6.37 billion is the lowest, while Nuvama Wealth Management Ltd.'s estimate of INR 7.04 billion is the highest.

 

Nuvama expects the share of equity in the quarterly average assets under management of HDFC AMC to be maintained at 67%. "This in turn is expected to drive revenue growth," the brokerage said in a report. It expects HDFC AMC's revenue to grow 14% on year and 4.4% sequentially to INR 10 billion.

 

For any AMC, revenue from operations comprises investment management fees from mutual funds, portfolio management services, and other advisory services fees. The fund house did not detail the share of fee income for the June quarter. However, in its annual report for 2024-25 (Apr-Mar), the AMC's increase in revenue from operations to INR 34.98 billion from INR 25.84 billion in FY24 was largely due to increase in investment management fee from mutual fund by 35%.

 

The fund manager's overall AUM would have risen 6.4% sequentially and 16% on year during the September quarter, according to Prabhudas Lilladher. Kotak Institutional Equities and YES Securities (India) Ltd. also had a similar view on the fund house's AUM growth, although JM Financial Institutional Securities had a slightly less optimistic view and expects AUM to grow 5.3% sequentially and 15% on year.

 

Despite the steady growth in AUM, HDFC AMC, along with other fund houses, is expected to see a sequential decline in its profit due to a fall in its other income from adverse mark-to-market movement, brokerages said. "Jul-Sept was a weak quarter from a market performance standpoint (Nifty-500 down 3% quarter on quarter), even though strong flows countered this weakness, resulting in mutual fund average AUM being up 7% quarter on quarter," Kotak Institutional Equities said in a report.

 

In the September quarter, industry-wide net inflows into open-ended equity funds were INR 1.07 trillion. However, the industry AUM grew by only INR 215 billion to INR 33.68 trillion, latest data shows.

 

In the trailing quarter, HDFC AMC had reported a net profit of INR 7.48 billion, up 24% on year and 17% sequentially on the back of a 34% on-year surge in other income to INR 2.33 billion due to mark-to-market gains on both the equity and debt investment books. The revenue from operations had also nearly 25% to INR 9.68 billion during the June quarter. 

 

In the June quarter, HDFC AMC's AUM were INR 8.57 trillion, up 21% on year. The fund house's equity AUM were INR 5.28 trillion, up 19% on year. Debt scheme assets were INR 1.79 trillion, up 22% on year. The fund house had a market share of 12.8% and 13.3% in equity-oriented and debt AUM, respectively, at the end of June.

 

According to brokerages, yields are expected to decline sequentially due to the growth in AUM. "Yields may fall marginally due to telescopic pricing which could be partially offset by increase in equity and balance funds' share (in asset mix)," Prabhudas Lilladher said in a report. For the September quarter, key developments to look out for will be the management's commentary on new asset class, new fund launches, and distributor commission payouts, Nuvama said. 

 

Since reporting its June quarter earnings, the stock has risen 2.7%. On Monday, the stock closed nearly 3% higher at INR 5,669 on the National Stock Exchange. HDFC AMC, investment manager to HDFC Mutual Fund, has diversified asset classes and scheme categories.

 

Of the 10 brokerage reports on the company available with Informist, nine have a 'buy' rating with an average target price of INR 5,848 per share. One brokerage has a 'hold' rating on the fund house. 

 

The following are the Jul-Sept earnings estimates for HDFC AMC from six brokerages in descending order of the estimate of net profit in INR million:

 

Brokerage firm	Net sales	Net profit
Nuvama Wealth Management Ltd	10,166	7,043
YES Securities (India) Ltd	10,369	6,615
Motilal Oswal Financial Services Ltd	10,115	6,600
JM Financial Institutional Securities Pvt Ltd	10,102	6,465
Kotak Institutional Equities	10,195	6,415
Prabhudas Lilladher Pvt Ltd	10,070	6,372
Average	10,170	6,585

 

End

 

Edited by Ashish Shirke

 

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