ABSLAMC - Aditya Birla Sun Life AMC Limited Share Price

The management of Aditya Birla Sun Life AMC provided a promising outlook during the earnings call for Q4 FY25. They expect the global economy to grow by 3.3% in FY26, with moderate inflation expected to decrease to 4.2%. In India, GDP growth is projected at 6.5%, supported by sustained domestic demand and declining inflation, which is anticipated to average around 4.1%. The fiscal deficit is targeted to reduce to 4.4% of GDP, reflecting the government's commitment to fiscal consolidation.

For the Indian Mutual Fund industry, the quarterly average AUM reached Rs.67.42 lakh crores as of March 31, 2025, marking a year-on-year growth of 25%. However, equity net sales in Q4 FY25 were Rs.1,21,000 crores, down from Rs.1,62,000 crores in Q3 FY25. Despite this, SIP inflows grew by 35% year-on-year, contributing approximately Rs.25,900 crores in March 2025. The company reported a total AUM of Rs.4.06 lakh crores, up 17% year-on-year, with quarterly equity average AUM at Rs.1.69 lakh crores, reflecting an 11% year-on-year increase.

Management highlighted continued efforts to improve market share, emphasizing a strong sales momentum and enhanced investment performance. They noted that the profit after tax for FY25 was Rs.931 crores, a rise of 19% year-on-year, with operating revenues at Rs.1,685 crores, reflecting a 25% increase. The board has proposed a dividend of Rs.24 per share, up from the previous year.

Key forward-looking points include the planned launch of the ABSL India Equity Innovation Fund, with anticipated AUM of Rs.44,000-Rs.45,000 crores, expected growth in the passive assets segment (currently at Rs.34,700 crores), and continuous enhancements to PMS and AIF offerings to meet evolving market demands.

Q&A Highlights from Aditya Birla Sun Life AMC Q4 FY25 Earnings Transcript

1. Question: "What factors broke employee expenses this quarter; were there higher variable payouts?"
Answer: The increase in employee expenses reflects our annual bonus provision, which rose due to the company's performance. The sequential rise from Rs. 88 crores to Rs. 99 crores was primarily driven by this bonus provision, estimated using year-end formulas. Looking ahead to FY26, I suggest a normalization in employee expenses unless performance demands otherwise.

2. Question: "What details can you provide about the ESIC mandate?"
Answer: The ESIC mandate is primarily a debt-oriented advisory within our portfolio management service. We're projecting realizations around Rs. 44,000-45,000 crores based on the shared formula. This is a prestigious win, aimed at expanding our advisory services to other institutions. We've already received funds and started investing.

3. Question: "What are the trends affecting your SIP data?"
Answer: We experienced a dip in live SIP accounts this quarter, consistent with industry trends due to recent market volatility. We're proactively promoting SIP growth and suggest that with market recovery, we anticipate an upward trend in SIPs. However, I refrain from projecting exact figures too early.

4. Question: "Can you clarify the flow momentum and market share recently?"
Answer: Yes, we've witnessed improved flow momentum, particularly in our focused funds which are seeing positive sales. Our market share loss has narrowed. We remain dedicated to enhancing our fund performance to attract positive net sales moving forward.

5. Question: "How do you foresee employee expenses evolving?"
Answer: Employee expenses have risen due to performance-linked bonuses, but we anticipate this will stabilize. We are optimizing our sales team, adding targeted roles intended to enhance our service quality while controlling costs.

6. Question: "Can you comment on yield and net flows in equities?"
Answer: The yield impact arises from a lower equity mix, dropping from 47% to around 45-46%. We're seeing an improvement in performance across major funds, leading to upward net flows which we hope to sustain into the next quarters.

7. Question: "What is driving the significant increase in offshore and alternate AUM?"
Answer: The growth was fueled by winning a significant Canadian Pension Fund mandate and our new ESIC mandate, which collectively reflects an effective customer strategy, buoyed by market interest in alternate assets.

This concise summary presents a clear overview of significant management responses during the Q&A session, encapsulating their insights and projections for the upcoming period.