Q1 Show Boosts Outlook for AMCs

With asset management companies (AMCs) managing to largely ride out market volatility over the past year, the outlook for their stocks has brightened.

- ABHISHEK KUMAR

This is amid multiple tailwinds and a strong performance on the earnings growth front during the June quarter (Q1), going by the post-results analysis put out by brokerages.

In Q1, three of the four AMCs registered double-digit profit growth compared to the same quarter last year. HDFC AMC saw its net profit surge 24 percent year-on-year (Y-o-Y) to ₹748 crore. Nippon Life India's net profit grew 19.2 percent to ₹396 crore, while Aditya Birla Sun Life (ABSL) saw its profit soar 17.6 percent to ₹277 crore. UTI's net dropped 7.5 percent Y-o-Y to ₹254 crore. However, compared to the previous quarter (Q4), profit was up nearly 40 percent.

While the strong performance for some AMCs has been driven by strong gains in 'other income', revenue from operations of most AMCs witnessed growth. It was buoyed by surging systematic investment plan (SIP) inflows and mark-to-market gains.