HDFC AMC has recorded a profit of Rs 368 crore in July-September, 79% higher from Rs 205 crore in the corresponding period last fiscal. The AMC’s balance sheet shows that corporate tax cut and reduced expenses on distribution have boosted its profitability.
Regulatory changes such as banning upfront commission and asking AMCs to pay commission from the scheme instead of AMC book have helped fund houses reduce their expenses incurred on distribution commission.
In July-September this year, the AMC incurred expenses worth Rs 80 lakh as fees and commission. The number is a whopping 76% lower than Rs 73.50 crore in the corresponding period last year.
Reduction in corporate rate tax has also boosted its profitability. The company’s tax expenses in July-September this year stood at Rs 59 crore, 35% lower than Rs 91 crore in the corresponding quarter last year.
In July-September last year, the company’s profit before tax came at Rs 297 crore, but tax expenses worth Rs 91 crore or 31% of the total amount shrank the net profit to nearly Rs 206 crore. This year, however, the profit before tax stood at Rs 427 crore and the tax expenses came at 59 crore or 14% of the taxable amount.
