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An analysis of net profit or profit after tax (PAT) done by Cafemutual shows that the MF industry has earned net profit of over Rs.8000 crore in FY 2021-22 as against Rs.6800 crore in FY 2020-21, a growth of 34%.
Net profit is derived after deducting all expenses like operation, taxation and so on. We have covered 35 AMCs to arrive at this data. Data from five AMCs – Bank of India, Franklin Templeton, HSBC, IDBI and Trust could not be obtained.
Of the 35 AMCs, 27 AMCs were profitable last financial year. Of the profitable companies, only three AMCs saw negative growth.
Overall, ICICI Prudential AMC became most profitable fund house last financial year with PAT of Rs.1450 crore. HDFC AMC and SBI AMC were the next two in the list with net profits of Rs.1400 crore and Rs.1100 crore, respectively.
Talking about profits, the MD and CEO of a top fund house requesting anonymity said that AMCs is not a profitable business compared to other financial products. “With assets close to Rs.32 lakh crore as on March 2021, the entire industry booked net profit of just Rs.8000 crore, which is just not even 1/4th of a basis point. With assets size like this or even less assets, banks make much more profits compared to mutual funds. Even insurance companies are making good profits compared to the assets they manage.”
All in all, AMCs derive profit from three businesses – mutual funds, PMS and AIFs and offshore advisory among other things.
Two AMCs - Motilal Oswal MF and IIFL MF with focus on PMS and AIF space did well last financial year. Both companies have reported net profit of Rs.284 crore and Rs.165 crore, respectively, which was more than that of most top 20 fund houses.
Nine companies reported net loss with PGIM, Mahindra and ITI among the AMCs with over Rs.30 crore of losses.
Here is the complete of net profits of AMCs:
