HDFC AMC Q2 PAT drops 8% YoY; market share continues to decline

HDFC Asset Management Company (HDFC AMC)'s net profit fell 8% to Rs 337.9 crore on 8% decline in revenue from operations to Rs 456.2 crore in Q2 FY21 over Q2 FY20.

Profit before tax in Q2 September 2020 stood at Rs 462.8 crore, up 8% as against Rs 427.5 crore in Q2 September 2019. Tax expense in Q2 FY21 surged 110.98% to Rs 124.9 crore from Rs 59.2 crore in Q2 FY20.

Total expenses during the quarter declined 12% year-on-year (YoY) to Rs 107.1 crore. The operating profit of the company in Q2 September 2020 was Rs 349.10 crore. While this is 7% lower than the operating profit of Rs 376.50 crore in Q2 September 2019, it is 16% higher than the operating profit of Rs 300.60 crore in Q1 June 2020.

The fund house's market share stood at 13.6% as on 30 September 2020 as against 14.5% as on 30 June 2020 and 14.7% as on 30 September 2019.

The company's quarterly average Assets Under Management (QAAUM) was Rs 3,75,500 crore as of 30 September 2020 compared to Rs 3,76,600 crore as on 30 September 2019.

"Our financial performance in the first quarter had shown a worsening trend due to the effects of the Covid-19 on the markets. While there continues to be uncertainty regarding how the Covid-19 pandemic will ultimately pan out, markets have stabilized and our financial performance this quarter has shown an improvement. This is evident from sequential improvement in our profit parameters and even in our operating margin which has gone up from 34 bps in the quarter ended June 30, 2020 to 37 bps in the quarter ended September 30, 2020," HDFC AMC said.

HDFC AMC is investment manager to HDFC Mutual Fund. The company has a diversified asset class mix across equity and fixed income/others. It also has a countrywide network of branches along with a diversified distribution network comprising banks, independent financial advisors and national distributors.

The scrip fell 2.01% to Rs 2310.95 on the BSE. It traded in the range of 2310.40 and 2354 so far during the day.

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