Nippon Life India AMC has witnessed its net profit increase by 25% in the June quarter to Rs 156 crore, as against Rs 125 crore logged in the same period last year.
The asset management company has largely benefitted from a sharp decline in expenses and a considerable increase in other income that includes income frominvestments.
Overall expenses declined by 24% to Rs 137 crore in Apr-Jun as against Rs 180 crore a year ago. This was largely on the back of a fall in fee and commission expenses to Rs 9 crore from Rs 25 crore a year ago. Employees benefit also declined to Rs 72 crore from Rs 82 crore a year ago.
Meanwhile, other income rose by a whopping 192% to Rs 1,031 crore in this lockdown quarter, as against Rs 353 crore a year ago.
Moreover, a decline in tax outgo also boosted the company’s bottomline. In Apr-Jun this year, the AMC’s tax outgo stood at Rs 44 crore, nearly 21% lower than Rs 55 crore a year ago.
A research note by Emkay Global Financial Services noted that Nippon Life India AMC’s revenue yields are likely to be impacted by a change in portfolio mix toward rising share of liquid schemes over equity schemes. This, in turn, will impact the profitability. “However, we expect overall trends to improve in H2FY21 with the normalization of economy,” Emkay Global Financial Services noted.
