AUM milestone crossed; SIP contraction masks solid PAT growth

Call reports ₹309Cr PAT; delivered ₹309.5Cr PAT; growth rates aligned

Delivered result shows ₹463Cr revenue +3.5% YoY; call revenue includes mandates/full gross

Acknowledged marginal reduction this quarter; gross registration offset by ELSS outflows

Yields maintained (63-64 bps equity); PAT growth at 12% supports claim; commission restructure executed

PMS/AIF contribution ₹25Cr on ₹625Cr revenue ≈4% net after commission payout; gross 7% stated

No independent verification in call; management assertion only

Prior FY26 guidance emphasized 'expand SIP book.' Actual Q1: 'marginal reduction' this quarter. Attributed to ELSS outflows and May rate volatility, not structural.

Products added to HDFC, YES Bank, Standard Chartered recommendation lists in Q1; MD explicitly mentioned 'improvement coming from sales engagement' going forward.

New Head of Passives hired (Hemen Bhatia, 20+ years experience). ETF AUM +47% YoY vs industry 29%; framed as key strategic focus.

Prior worry on TER impact now claimed managed; yields maintained 63-64 bps equity post-April 1 rollout. Commission restructured 'win-win' with distributors.

₹6.08 Lakh Cr EPFO received (added in Q4 FY26); now prominent in AUM story. Positioned as 'gate-opener' to privately managed EPFO growth.

TER regulation rolled out; yields maintained: equity 63-64 bps, debt 24-25 bps, liquid 12-13 bps, ETF ~8 bps. Yields are 'true picture' and will be maintained. Employee cost +₹10Cr/quarter due to ESOP effective January 2026.

Telescoping pricing will come into play as AUM size grows. Yields expected to remain similar ±few bps plus mix benefit from Alternate. Active will remain dominant; passive added for customer choice and low-cost offering. Absolute profit contribution will remain strong despite lower margins.

Commission structure optimized for 'win-win'; no specific basis points transfer quantified. Described as 'neutral' to both AMC and distributors; yields intact, distributor margins maintained.

Flagship schemes (FlexiCap, Balanced Advantage, etc.) showing improved flows. SIP softness is ELSS-driven (industry outflow) and May interest rate volatility (large fixed income position hit in May, recovered in June). Core focus funds showing SIP registration improvement.

PMS/AIF gross contribution 7% of total revenue; net post-distributor commission 4% of overall revenue. SIP AUM approximately ₹87,000 crore for quarter.

MD not tracking exact market share improvement; focuses on flows. Flagship funds (FlexiCap, Balanced Advantage, MultiCap, Small Cap, PSU Equity) seeing flows on month-on-month improvement. Banking channels gradual pickup; MFD volumes gradually rising. Recent product approvals (HDFC, Kotak, YES, Standard Chartered) expected to drive sales engagement.

1,638 employees as of June end.

Market dipped multiple times April-June; days of market decline offset typical seasonal gain. Average ₹198,722 Cr and closing ₹198,969 Cr are in line due to volatility within quarter.

ESIC mandate very marginal revenue; does not give 'big revenue.' Separate team required. But opened gate for privately managed EPFO, which is source of traction and flows. Revenue impact negligible, gate-opener valuable.

FlexiCap, Balanced Advantage Fund, Multi-Asset Allocation Fund, Small Cap. Thematic/Value funds positioned but lower priority. Equity Savings Fund positioned for conservative HNI segment. New SIF to be driven post 6-month track record established.

OPEX remain within inflationary guidelines. Employee cost stabilized post-ESOP rollout (~₹10Cr/quarter factored in). No cost shocks expected. Normal inflation for non-employee costs.

Alternate divided into 3 categories: PMS long-only equity (₹5K Cr, target ₹20-21K Cr over 3 years), AIF Performing Credit (₹5-7K Cr target), Real Estate Credit Fund (established 14% returns). Will scale via seed capital commitment (up to 10% of fund size) and bridging capital for large deals. Each category guns for ₹5-7K Cr initial size.

SIP cumulative contribution ₹3,300 Cr for quarter (in line with Q4 ₹3,300 Cr). Month-on-month fluctuations present. (Did not provide ex-ELSS breakdown.)

Fee/commission directly linked to Alternate business revenue; is distributor commission paid out. Growth rate mirrors Alternate business revenue growth.

MD sees improvement comparing Q1 FY27 to Q1 FY26; also better than full-year FY26 run rate. April strong, May-June muted due to market volatility. Once products on recommendation list and performance improves, flow momentum expected to improve. Need time for this to stabilize and auto-mode.

Core MF +6% YoY; Passive +14% YoY. Alternate expected similar range (~4% of total revenue) 'in coming quarters.'

Post-TER regulation April 2026; regulatory changes now rolled out. Yields are 'true picture' going forward.

FY26 guidance 'neutral impact' on profitability; Q1 results show OPM 55.6%, NPM 49.5% (flat). Dependent on yield mix maintenance.

Passive margins lower but absolute profit contribution intended to remain strong; trade-off acknowledged.

SIP book marginal reduction this quarter despite product approvals. ELSS outflows and interest rate volatility blamed, but underlying momentum unclear.

Telescoping pricing will compress yields as AUM grows. Passive business has structurally lower margins (8 bps ETF vs 63-64 bps equity active). Alternate business 4% of revenue but lower margin.

EPFO mandate ₹6.08L Cr represents ~60% of closing AUM (₹10L total). If mandate scales unexpectedly, is reallocated, or regulatory terms change, AUM/revenue volatility extreme.

TER regulation rolled out April 2026; yields now managed. But further regulatory cuts (commission caps, fund categorization) could pressure yields or force business model changes.

IMD expecting below-normal monsoon due to El Niño. Could dampen rural consumption, equity market sentiment, and SIP flows (retail discretionary).