HDFCAMC - HDFC Asset Management Company Limited Share Price

In the Q1 FY '26 earnings call, HDFC Asset Management Company Limited provided an optimistic outlook, highlighting strong performance metrics. For the quarter ended June 30, 2025, the company reported a closing AUM of INR 8.5 trillion, marking a 21% increase year-on-year and capturing an overall market share of 11.5%. Actively managed equity-oriented assets surpassed INR 5 trillion, with a growth rate of 19% year-on-year. The firm continues to attract investor interest, with SIP contributions increasing to INR 273 billion in June 2025, a rise from INR 21,262 crores the previous year.

Management noted significant net inflows during the quarter, with equity-oriented funds seeing inflows of INR 911 billion. The company remains committed to expanding its investor base, adding 500,000 unique investors during the quarter. The systematic transaction volume reached INR 40.1 billion, further underscoring the positive momentum.

Looking forward, management is enthusiastic about the debt market, expecting a constructive outlook supported by favorable liquidity conditions. The company is set to expand its product offerings, particularly in specialized investment funds, having received SEBI approval for such products. An employee stock ownership plan was also introduced, with an estimated non-cash charge of INR 205-210 crores spread over several years, reflecting management's strategy to align employee and shareholder interests.

Overall, HDFC AMC's strategy emphasizes growth across equity, debt, and alternative investments, underpinned by a robust distribution network and strong product offerings.

Question 1: Can you share the indicative yields across equity, debt, liquid ETF segments? Why has there been yield expansion in this quarter versus the previous quarter?

In response, I stated that equity yields were about 58-59 basis points, debt was between 27-28, and liquid was approximately 12-13. On a blended basis, we recorded 46 basis points, consistent with previous quarters, indicating no significant yield expansion. The perception of a larger expansion may stem from specific fund performance, but overall yields have remained stable.

Question 2: What will be the cost implication of the ESOP and PSU plan over the next 3-4 years? How should we build our expenses going ahead?

I explained that the new ESOP and PSU scheme would result in a non-cash charge of INR205-210 crores over the vesting period. For FY '26, the expected charge is around INR56 crores, followed by INR63 crores in FY '27, INR51 crores in FY '28, INR32 crores in FY '29, and INR6 crores in FY '30. This reflects our commitment to employee ownership, aiming to align interests and foster long-term value creation.

Question 3: Where are we in terms of setting up the team for the new asset class? Any update on that?

I confirmed that we've secured SEBI's approval to launch a Specialized Investment Fund (SIF). Our focus is on developing a range of offerings that align with our investment strengths and market demands. While I stated that we evaluate our investment and risk management capabilities continually, we prioritize being the best rather than being the first in launching these new products.