The net profits of the top nine AMCs grew by 8% from Rs. 1,467 crore in FY13-14 to Rs. 1,582 crore in FY14-15, shows an analysis done by Cafemutual.
HDFC held the mantle of being the most profitable fund house. Its profit after tax (PAT) stood at Rs. 415 crore in FY14-15, up 16% from Rs. 358 crore in the previous fiscal. The fund house saw its AAUM grow by 44% from Rs. 1.12 lakh crore to Rs. 1.61 lakh crore during the same period.
AMC net profits
The second most profitable AMC was Reliance AMC. Its net profit increased from Rs. 303 crore to Rs. 357 crore during the same period, a growth of 18%. Reliance MF’s AAUM increased by 33% from Rs. 1.03 lakh crore in FY13-14 to Rs. 1.37 lakh in FY14-15.
Among the top nine AMCs, the highest profitability growth (in percentage terms) was recorded by ICICI Pru AMC. Its PAT increased from Rs. 183 crore to Rs. 248 crore during the same period. ICICI Pru AMC’s AAUM grew by 40% from Rs. 1.06 lakh crore to Rs. 1.48 lakh crore during the same period.
The fourth most profitable fund house was UTI MF which saw its PAT grow from Rs. 170 crore to Rs. 201 crore. UTI too saw its AAUM grow by 25% from Rs. 74,233 crore in March 2014 to Rs. 92,751 crore in March 2015.
Franklin Templeton’s 2015 annual report was not available on its website and hence it was excluded from the study.
Among the top nine AMCs, Kotak AMC was the only fund house to record losses. From a net profit of Rs. 33 crore in FY13-14, it recorded a net loss of Rs. 36 crore in FY14-15.
Kotak AMC attributed the loss to increase in distribution expenses. “Kotak AMC had seen a market share of 5% on the net equity inflows during FY14-15, backed by very good performance of equity funds. Kotak AMC also has done exceedingly well in the equity arbitrage category and has seen a market share of around 19% on AAUM for FY 14-15. This increase in the market share resulted in a substantive jump in the upfront brokerage and other distribution expenses. The business promotion, distribution and mutual fund expenses increased by Rs. 37 crore as compared to the previous year,” states Kotak AMC annual report.
DSP BlackRock and IDFC AMC recorded a drop in their profits. The PAT of DSPBR dipped from Rs. 68 crore to Rs. 38 crore during the same period. Similarly, IDFC AMCs PAT declined from Rs. 91 crore to Rs. 70 crore.
Fund houses earn from the total expense ratio charged on schemes. Equity funds, which charge higher expenses as compared to debt funds, are more profitable for fund houses. The industry received net inflows of Rs. 1.03 lakh crore in FY14-15. Of this, 69% or Rs. 71,030 crore has come in equity funds, which helped AMCs grow their PAT.
The average assets under management of the industry grew from Rs.9.45 lakh crore to Rs. 10.82 lakh crore in FY14-15, a growth of 14%.
