Be constantly in the market The ups and downs remain a hindrance to the asset management companies (AMCs). But due to the new source of investment and revenue (specialized investment fund-SIF) through the Systematic Investment Plan ie SIP, the picture of the industry is positive. Brokerage firms have said these things in a review of their results of the fourth quarter.
The declining assets (AUMs) under managing assets (AUMs) and softening of investment due to the decline in the market during the last quarter of FY 2024-25 affected the performance of funds. The impact of low investment income was also seen on benefits.
HDFC AMC earned a profit of Rs 638 crore, which is 18 per cent higher than the same quarter last year. The profit of Aditya Birla Sun Life (ABSL) rose by about 10 per cent to Rs 228 crore. The net profit of Nippon Life India and UTIs fell by 13 per cent and 44 per cent respectively. However, in the case of most listed companies, the decline in income was according to or less in the market estimates.
Motilal Oswal Financial Services said in a report that HDFC’s operational profit increased by 30 per cent on an annual basis and was in accordance with estimates at Rs 900 crore. Due to the increase in other income, the tax profit increased by 3 per cent and it stood at Rs 638 crore, which is 18 per cent higher at half annual and flat on a quarterly basis.
On an annual basis, ABSL AMC was the only AMC to record profit growth in the fourth quarter. Due to higher revenue, its net profit increased by about 10 percent. According to Increded Equities, AMC, which lost market share in recent years, was also successful in raising its stake in the previous quarter.
It states that the company is taking the right steps to improve market share. But we are watching the competition deepening with the ups and downs in the capital market which seems to have affected their equity market share and SIP investment.
In the midst of the recession in the equity market, the investment in SIP has been a ray of hope for the industry. In recent months, SIP investment has been around Rs 26,000 crore, which is slightly lower than all -time high levels of Rs 26,459 crore in December 2024. In comparison, gross lump sum investment in equity schemes has come down from a height of Rs 64,000 crore to about Rs 30,000 crore in June 2024.
Analysts say that after the recent decline, the evaluation is expected to bounce in the prices of shares. As of May 6, Nippon has come down 28 per cent from its 52 -week high. HDFC AMC has fallen by 12 per cent. UTI and ABSL have recorded 42 per cent and 44 per cent softening.
The inclusion of a new business segment as SIF has increased the chances of AMC’s income increase. Axis Securities said, the slow growth in AUM and pressure on the return will affect revenue estimates. Existing global uncertainties, withdrawal of foreign institutional investors (FIIs) and the scenario of weak rupee may affect the speed of growth to some extent and cause some instability. The regulation of the asset management industry is strictly strictly and regulatory uncertainty will affect our estimates.
First Published – May 6, 2025 | 10:43 pm IST
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