Nippon India AMC has recorded profit of Rs.149.3 crore in Oct-Dec 2019, as against Rs.109.5 crore in the corresponding period last fiscal, a growth of 36%, says a press release issued by the company.
An analysis of earnings growth of the fund house shows reduced expenses incurred on distribution has helped the fund house report strong earnings. 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.
The AMC incurred expenses worth Rs.12 crore as fees and commission in Q3 FY 2019-20, from Rs.73 crore in the corresponding period last year.
Another factor that has contributed to the profit is the introduction of corporate rate tax cut. In Q3 FY 2019-20, the difference between net profit and profit before tax stood at Rs.44.3 crore. In the corresponding period of 2018, expenses incurred on tax had stood at Rs.53.8 crore, shows the company statement.
In April-December FY 2019-20, Nippon India AMC has posted profit of Rs.411.5 crore, 23% higher than Rs.335 crore in the corresponding period of 2018.
Nippon India MF manages AUM of around Rs.2 lakh crore as on December 2019. Overall, the AMC has AUM of Rs.3.10 lakh crore across all businesses, which include PMS, AIF and offshore advisory services among other things.
