HDFC, ICICI Pru and Nippon India are the most profit-making among top 10 AMCs

Among the top 10 AMCs, HDFC, ICICI Prudential and Nippon India were the top three fund houses in terms of profits in FY 2018-19.

HDFC AMC’s profit after tax for FY 2018-19 stood at Rs 930.60 crore. Next in the list were ICICI Prudential AMC with profit of Rs 613.79 crore and Nippon India AMC with Rs 487.07 crore.

Further, a comparison with last year’s profit showed that Kotak AMC clocked the highest profit growth in percentage terms. In FY 2018-19, the company’s PAT stood at Rs 229 crore which was over 180% higher than Rs 81 crore in FY 2017-18. 

Of the top 10 AMCs, nine have clocked higher profits in FY 2018-19 as against FY 2017-18. Only IDFC AMC witnessed a decline in their profits. The AMC earned Rs 46 crore of profit, 55% less than Rs 104 crore in FY 2017-18.   

An analysis of earnings growth of these AMCs shows that the recent regulatory changes that banned upfront commission and asked AMCs to pay commission from the scheme instead of AMC book have helped fund houses reduce their expenses incurred on distribution commission.

A key contributor for AMCs to increase profitability is growth in equity assets. Also, AMCs derive profit from portfolio management, alternative investment funds and offshore advisory services among other things.

Note – Franklin Templeton AMC is among the top 10 AMCs based on AUM, but they have been excluded from this analysis, as their profitability was not available.