MF industry profits jumps 63 percent in FY 2014

Rising equity market and the resultant increase in assets under management has helped majority of fund houses report healthy profits.

The industry clocked 63% growth in its profit after tax (PAT) in FY 2013-14 at Rs.1,398 crore compared to Rs 859 crore in FY 2012-13, shows a study done by Cafemutual. During the same period, the industry’s AUM increased by 5% from Rs. 8.16 lakh to Rs.8.61 lakh crore.

Out of the 42 AMCs, 21 fund houses collectively posted a net profit of Rs. 1,701 crore in FY 2013-14 while the remaining incurred a combined loss of Rs. 300 crore. Fund houses like Goldman Sachs, IL&FS and IIFCL were not included in this list since IL&FS and IIFCL are infrastructure debt funds (IDFs). We could not ascertain the profitability of Goldman Sachs AMC.

The larger players benefitted the most from the bull run. Interestingly, all the top ten fund houses saw a double digit growth in their net profits. Cafemutual was the first to report the profits of top ten AMCs. Read here.

HDFC MF continued to remain the most profitable fund house. It posted a 12% growth in its PAT at Rs.358 crore in FY 2013-14 as compared to Rs. 319 crore the previous year. HDFC MF’s AUM grew by 11% from Rs.1.01 lakh crore in FY 2012-13 to Rs.1.12 lakh crore in FY 2013-14.

Reliance was the second most profitable fund house followed by ICICI Prudential. Both Reliance and ICICI Prudential saw their PAT grow by more than 50%. While Reliance MF’s PAT for fiscal 2013-14 stood at Rs.304 crore, up 54% from Rs.198 crore the previous year, ICICI Prudential’s PAT grew by 66% to Rs.183 crore in FY13-14 from Rs.110 crore the previous year. Reliance MF and ICICI Prudential saw their AUM grow by 13% and 18% respectively in FY 2013-14.

Among mid-sized fund houses, Axis, Sundaram, Canara Robeco, Tata and DWS were profitable. Axis MF clocked a net profit of Rs.2 crore as against the net loss of Rs. 6 crore the previous year. Similarly, Tata posted a growth of 13% in its PAT. Its net profit stood at Rs.17 crore in FY13-14 as compared to Rs 15 crore the previous fiscal.

Likewise, the profits of DWS MF rose from Rs. 10 crore in FY 2012-13 to Rs.17 crore in FY 2013-14.

However, Sundaram MF’s PAT declined by 12% to Rs. 15 crore in FY 2013-14 as against Rs. 17 crore in FY 2012-13. Canara Robeco also saw its net profit dip from Rs.14 crore to Rs.10 crore during the same period.

Meanwhile, JP Morgan and JM Financial swung back to positive growth in their profitability. While JP Morgan clocked a net profit of Rs.4 crore as against a net loss of Rs. 18 crore in the previous fiscal, JM Financial MF posted a growth of 100% in its PAT at Rs.4 crore as against Rs.2 crore in FY12-13.

If the bull run sustains, industry experts feel that AMCs will see a healthy growth in profits this year too.

Profit after tax (PAT) of fund houses in FY 2013-14

Source: Cafemutual study