#HDFCAMC Concall at 6:30 pm.
We would be providing live updates and major highlights. Stay tuned.
@adi2five @Maaachaaa69
@BaluGorade @j4jeswin @JstInvestments @SrishtiSharma_
@analystmohalla
We would be providing live updates and major highlights. Stay tuned.
@adi2five @Maaachaaa69
@BaluGorade @j4jeswin @JstInvestments @SrishtiSharma_
@analystmohalla
Opening comments
1.24 trillian inflow across asset class.
Closing aum 1378 billion.
70 % income is dependent on equity aum
Large inflow in debt fund.
Most preferred choice in amc
90 percent of transaction processed through internet.
(Whatsapp processing)
1.24 trillian inflow across asset class.
Closing aum 1378 billion.
70 % income is dependent on equity aum
Large inflow in debt fund.
Most preferred choice in amc
90 percent of transaction processed through internet.
(Whatsapp processing)
14.6 % market share in individual AUM
Due to Covid 19 pandemic
Has affected the equity schemes revenues.
(Decrease of 21%)
Due to Covid 19 pandemic
Has affected the equity schemes revenues.
(Decrease of 21%)
Reasons for decreass inEquity portion of AUM and company's market share
- Mostly due to Mark to market fall
- equity aum since the fall has been slowly recovering and continues to grow.
- increase in the book size majorly comes due to mark to market.
(Cont.)
- Mostly due to Mark to market fall
- equity aum since the fall has been slowly recovering and continues to grow.
- increase in the book size majorly comes due to mark to market.
(Cont.)
Major Focus on effective diversification style.
- Hired 3 new Fund managers, been sharing a good perspective in the market
- Reducing the overlap so that each fund has a distinctive position and strategies withe less overlap of stocks in next 2-3 quaters
- Hired 3 new Fund managers, been sharing a good perspective in the market
- Reducing the overlap so that each fund has a distinctive position and strategies withe less overlap of stocks in next 2-3 quaters
- Dividend yield fund might be the next new fund.
- But More focus towards thematic funds.
- But More focus towards thematic funds.
Sales structure and branch (for next 3-5 years)
- During covid, focused more in online processing. Branches worked with less workforce.
- New registration has doubled at the online platform.(hdfc mutual fund)
- No structural change in branch structure.
- During covid, focused more in online processing. Branches worked with less workforce.
- New registration has doubled at the online platform.(hdfc mutual fund)
- No structural change in branch structure.
Unique customer and rationalization of expenses
-Calculate unique customers by calculating net customers leaving.
- Sip Industry is down 10% and Hdfc amc is down 15%. (Fall in unique customer).
- Sip cancellation has gone up in the industry
(Cont.)
-Calculate unique customers by calculating net customers leaving.
- Sip Industry is down 10% and Hdfc amc is down 15%. (Fall in unique customer).
- Sip cancellation has gone up in the industry
(Cont.)
- Even after 3 years the return on investment in between the pandemic has been in low single digit
- Thus, SIP not very attractive for investors
- These slippage would be reduced in the next 3-4 quaters.
-26% of market share in terms of unique investors but no meaningful increase
- Thus, SIP not very attractive for investors
- These slippage would be reduced in the next 3-4 quaters.
-26% of market share in terms of unique investors but no meaningful increase
Rationalization
- other expenses due to CSR activity (donation to PM Cares percent)
- major focus to reduce operating expenses
- operating expense going down as the percentage of revenue.
- other expenses due to CSR activity (donation to PM Cares percent)
- major focus to reduce operating expenses
- operating expense going down as the percentage of revenue.
Process of transition
- board (NRC committee) is in the process of searching the next successor.
- Timing for successor announcement not yet confirmed.
- Tenor is ending in January 202, next successor would be announced before the end of tenor
- board (NRC committee) is in the process of searching the next successor.
- Timing for successor announcement not yet confirmed.
- Tenor is ending in January 202, next successor would be announced before the end of tenor
Other Income has gone up
-Total surplus has grown by 33%.
-Gain from market to market gain in debt funds
-Total surplus has grown by 33%.
-Gain from market to market gain in debt funds
- Last 1,2,3 year return have been negative or single digit. Therefore, there is less visibility of growth and would become clear post covid. Thus, new retail investors are not coming on board.
- Reposition of faith by Retail investors to invest would take time.
- Reposition of faith by Retail investors to invest would take time.
Retail Brokerage influence.
- Retail participation individually has significantly increased. Transactional values have been very high
- But positional plays(delivery volumes) have decreased
- Retail participation individually has significantly increased. Transactional values have been very high
- But positional plays(delivery volumes) have decreased
Debt funds
- Book size - Rs. 4200 crores(increased by Rs.300 crores in the current quaters)
- yield earned in last one year has 6 percent. Current quarter would see a higher yield.
- Book size - Rs. 4200 crores(increased by Rs.300 crores in the current quaters)
- yield earned in last one year has 6 percent. Current quarter would see a higher yield.
Credit risk finds across industry(HDFC AMC has exposure 13000 cr) had an increase in redemption.
In the Current quater, redemption has decreased (7-8 crores per day)
-increased exposure to AAA assets
- Profile of credit risk fund has improves significantly.
In the Current quater, redemption has decreased (7-8 crores per day)
-increased exposure to AAA assets
- Profile of credit risk fund has improves significantly.
Sharp reduction in physical transation
- Physical transaction have been severely constrained due to lockdown.
- Physical has gone down and will take time to normalize but online form has increased to offset.
- Physical transaction have been severely constrained due to lockdown.
- Physical has gone down and will take time to normalize but online form has increased to offset.
Small change in margins on equity products.
Margins on product groups have gone down.
Money inflow is in less margin product.
Thus, margins have come down.
Margins on product groups have gone down.
Money inflow is in less margin product.
Thus, margins have come down.
Company is facing the cycle where reasonable products are facing low return.
The solution is, comlany has reasonable large amount towards similar strategy and the company is focusing towards distinct strategies to reduce overlap.
The solution is, comlany has reasonable large amount towards similar strategy and the company is focusing towards distinct strategies to reduce overlap.
Fall in the revenue
80% is due to fall in aum
20% is due to fall in margins
Portfolio owns large number of stocks with high dividend yield.
Investing abroad, the company doesn't have expertise
Company would launch multi asset fund (for exposure in international securities)
80% is due to fall in aum
20% is due to fall in margins
Portfolio owns large number of stocks with high dividend yield.
Investing abroad, the company doesn't have expertise
Company would launch multi asset fund (for exposure in international securities)
