Nippon Life India Asset Management Ltd (BOM:540767) Q1 2026 Earnings Call Highlights: Record ...
Profit After Tax: INR3.96 billion, up 19% YoY and 33% QoQ.
Revenue: INR6.07 billion, up 20% YoY and 7% QoQ.
Other Income: INR1.46 billion, up 12% YoY and 5.3x QoQ.
Operating Expenses: INR2.29 billion, up 16% YoY and 8% QoQ.
Total Assets Under Management (AUM): INR7.44 trillion.
Mutual Fund Quarterly Average AUM: INR6.13 billion, up 27% YoY and 10% QoQ.
Market Share: Increased 23 basis points QoQ to 8.49%.
SIP Contribution: INR806 billion, up 29% YoY and 3% QoQ.
ETF AUM: INR1.74 trillion, with a market share of 19.76%.
Digital Purchase Transactions: 3.57 million in Q1 FY26, up 27% YoY.
Offshore AUM: INR166 billion, up 10% YoY.
Warning! GuruFocus has detected 5 Warning Signs with RVTY.
Release Date: July 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Nippon Life India Asset Management Ltd (BOM:540767) achieved its highest ever quarterly operating profit at INR3.78 billion and profit after tax at INR3.96 billion.
The company was the fastest-growing AMC among the top 10 AMCs on both a quarter-on-quarter and year-on-year basis.
Market share increased to 8.49%, the highest since June 2019, with significant gains in equity net sales and SIP market share.
The company launched four new products in Q1 FY26, expanding its offerings in the passive fund segment.
Digital purchase transactions rose by 27% YoY, with digital business contributing 75% of total new purchase transactions in Q1 FY26.
Negative Points
Systematic folio numbers declined sequentially due to a one-time cleanup of inactive SIPs, impacting the numerator.
There is a potential for a 2 to 3 basis point decline in yields annually due to telescopic pricing and higher costs for new flows.
The ESOP cost for the year is expected to be around INR46 crores, with a potential increase in the remaining quarters.
The company's equity AUM share decreased by 0.3% quarter-on-quarter to 46.9% for Q1 FY26.
There is uncertainty regarding the impact of new regulatory proposals on scheme sizes and TER, which could affect future strategy.
Q & A Highlights
Q: Can you provide details on the yields for different segments this quarter and any commentary on ESOP costs? A: The blended yield for the current quarter is 36 basis points, with equity yield at 55 basis points, debt at 25 basis points, liquid at 12 basis points, and ETF at 17 basis points. The ESOP cost for the year is expected to be around INR46 crores, with the current quarter's cost at INR11 crores.
Q: Why has the systematic folio declined sequentially, and is this cleanup a regular activity? A: The decline was due to a one-time cleanup of inactive SIPs across the industry, which was not specific to any month or AMC. This was a large-scale cleanup, and while it might be revisited in 6 to 12 months, it is currently considered a one-time activity.
Q: What is the rationale behind launching new passive funds, and how have they performed? A: We focus on unique ideas in the market, and our recent passive fund launches have seen interest. We do not target specific volumes for these funds, but they build up over time as investors flow into these passive ideas. Our MNC fund, launched in July, received a good response.
Q: Can you explain the impact of the new AMC discussion paper on scheme size and TER? A: The proposal suggests launching new schemes if the existing scheme size exceeds INR50,000 crores, allowing the new scheme to charge a TER equivalent to the old scheme. While we await final guidelines, we do not see any negatives and anticipate potential marginal positives.
Q: Is there a change in customer behavior or distributor preferences in recent months? A: There hasn't been a significant change in the last six months, but over the years, investors have matured, reacting less to market volatility. Brand comfort and service experience are increasingly important alongside performance, influencing investor and distributor decisions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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