Seven mid-sized fund houses managed to cut their losses to the tune of Rs 82 crore in FY12 despite bad market conditions.
Even as the BSE Sensex lost more than 1700 points in FY11-12, at least seven mid-sized AMCs have managed to cut their losses, shows a Cafemutual study of 15 mid-sized AMCs that are currently ranked 10 to 25.
Axis, Baroda Pioneer Mutual Fund, LIC Nomura, IDBI, JM Financial, J P Morgan and Peerless managed to minimize their losses to the tune of Rs 82 crore. Religare Mutual Fund turned profitable by posting a net profit of Rs 0.31 crore against a net loss of Rs 50 crore in FY11. BNP Paribas AMC which reported a net loss of Rs 24 crore in FY11 reported a profit of Rs 1 crore in FY12.
Experts
believe that cost rationalization and right product mix will be important for mid-sized
and small AMCs to sustain their businesses. “This is our third year of
operation and we hope to break-even this year. We have maintained our costs
from day one. Many of our employees have been given dual responsibilities. Our
offices are located in low-rental areas. Our revenue is going up because the
asset size is growing. The contribution of high-margin product is becoming
better. We did a lot of activities which helped us directly connect with our
customers instead of spending money on above the line activities,” said Akshay
Gupta, CEO, Peerless Mutual Fund.
Raising assets has also helped some AMCs cut their losses.
Axis (Rs 513 crore), Deutsche (Rs. 3,958 crore, IDBI Rs (Rs 1954) and JP Morgan (Rs 2959) recorded an increase in their assets in FY12.
The combined net loss of 8 AMCs came down at Rs 161 crore in FY12 as against Rs 292 crore in FY 2010-11. Six AMCs posted a combined profit of Rs 54 crore as against Rs 48 crore the previous year, showing a marginal improvement in their businesses.
Among the profitable players, Sundaram and Deutsche recorded a dip in their profits in FY12. Sundaram MF’s profit after tax dipped from Rs 13 crore in FY11 to Rs 11 crore in FY12. Deutsche AMC saw its net profit decrease from Rs 11 crore in FY11 to Rs 6 crore in FY12. Tata AMC saw its net profit grow from Rs 17 crore in FY11 to Rs 31 crore in FY12.
Among the mid-sized players, HSBC and Principal reported an increase in their losses. HSBC MF’s net loss increased from Rs 8 crore in FY11 to Rs 27 crore in FY12 while Principal MF’s net loss went up to Rs 8 crore from Rs 3 crore during the same period.
Also read: Six out of the top ten AMCs register a growth in profits in FY12
