HDFC AMC — Q2 FY26 earnings call

Call held 15 Oct 2025

Management summary

HDFC AMC reported a robust Q2 FY26 with significant AUM growth to ₹8.7 trillion and a 16% YoY increase in revenue from operations to ₹10,260 million. The company saw strong SIP inflows, adding 6 million new accounts, and maintained its market leadership among individual investors. A 1:1 bonus share issue was approved, reflecting confidence, despite some moderation in debt and liquid fund inflows.

Highlights

  • AUM grew to ₹8.7 trillion, reflecting a market share of 11.5% and 12.8% on an ex-ETF basis.

  • Revenue from operations increased 16% YoY to ₹10,260 million.

  • Operating profit grew 13% YoY to ₹7,796 million.

  • Net addition of 6 million contributing SIP accounts in the quarter, with monthly SIP contribution reaching ₹294 billion.

  • Approved a 1:1 bonus share issue, subject to shareholder approval.

Concerns

  • Debt mutual funds experienced moderation, with quarterly inflows easing to ₹148 billion from ₹1,339 billion in the previous quarter.

  • Liquid funds witnessed outflows of ₹219 billion compared to net inflows of ₹609 billion in the prior quarter.

  • NIFTY50 delivered negative returns in the last one year.

Key financials

2 periods

Headline

  • AUM
    8.7 Tn
  • Revenue from Operations
    10,260 Mn
    YoY +16%
  • Operating Profit
    7,796 Mn
    YoY +13%
  • PAT
    7,179 Mn
  • PAT (ex-tax reversal)
    6,711 Mn
  • Equity Yield
    58 bps
  • Debt Yield
    27.5 bps
  • Liquid Yield
    12.5 bps
  • Operating Expenses
    2,464 Mn
  • SIP Contribution (Sep 2025)
    294 Bn
  • Market Share (Overall)
    11.5%
  • Market Share (Individual Investors)
    13.1%

Q2 FY26

  • New SIP Accounts
    6 Mn

What they filed

Q1 FY27: revenue up 13.4%, net profit up 12.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue887 934 901 968 1,026 +16%1,074 +15%1,050 +17%1,098 +13%
EBITDA704 764 731 774 801 +14%877 +15%846 +16%852 +10%
Net profit577 641 639 748 718 +24%770 +20%623 −3%838 +12%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Profitability

  • Operating Margin Profitability · ongoing · Medium confidence 33-35 basis points range
    The one metric that I keep a particularly close eye on is our operating margin. We have typically operated in the 33, 35 business points range, and the objective is to stay within that corridor, though that is not always straightforward.

    — Navneet Munot, Managing Director and Chief Executive Officer

Operating Expenses

  • Annual OPEX Growth Operating Expenses · annual basis · Medium confidence 12-15%
    So, on an annual basis, if you look on a sustainable basis, 12% to 15% of OPEX is something which we would look at from a growth point of view.

    — Naozad Sirwalla, Chief Financial Officer

  • ESOP Amortization Expense Operating Expenses · H2 FY26 · High confidence ₹42 crores
    For the second half of this year would be around Rs.42 crores, for FY27 we think it is about Rs.67 crores, for FY28 Rs.53-odd crores, then it tails off, FY29 about Rs.33 crores and it tails off after that.

    — Naozad Sirwalla, Chief Financial Officer

  • ESOP Amortization Expense Operating Expenses · FY27 · High confidence ₹67 crores

    — Naozad Sirwalla, Chief Financial Officer

  • ESOP Amortization Expense Operating Expenses · FY28 · High confidence ₹53 crores

    — Naozad Sirwalla, Chief Financial Officer

What to watch in Q3 FY26

Final guidelines on B30 incentives

next quarter
Current Awaiting final guidelines
Target Implementation details and potential impact on topline

Why it matters

New SEBI incentives could significantly boost inflows from B30 towns, impacting market share and revenue.

Yes, so I mean, we are yet to get the final guidelines on that in what manner and what shape it will be implemented.

Risks & concerns

  • Margin compression from telescopic pricing

    medium

    margin compression from telescopic pricing is inevitable and remains an industry reality

    Management acknowledged

  • Volatility in fund flows

    low

    There will be some cyclicality, we have seen that before, and maybe month-to-month or quarter-to-quarter, some bit of volatility in flows

    Management acknowledged

Q&A highlights

6 direct
Long-term vision and growth strategy Direct
We continue to invest in everything that I have mentioned so far, having the best people across our investment, risk, product, and all other functions, continue to expand our presence. Over the last two years, we have opened 50 new offices, a large number of them are in what we call in our industry B30 towns... We continue to invest in our digital assets, in our technology... We have been investing to grow in the alternative space, in the PMS space, and of course, offering all of this to global institutions who would like to invest in India.

Provides a comprehensive overview of the company's multi-pronged growth strategy, including geographical expansion, digital investment, and diversification into alternative assets.

Asked by Sucrit Patil

Increase in other expenses and sustainable OPEX run rate Direct
So, I would request you to look at OPEX on an overall annual basis and broadly we have been discussing this on past calls as well, that between 12% and 15% is what we should expect OPEX to grow. In this quarter, there was also CSR expense, which is mandatory and there were some NFOs, new business promotion, which we spent on.

Clarifies the drivers behind the increase in other expenses (CSR, NFOs) and provides a forward-looking guidance range for sustainable OPEX growth.

Asked by Prayesh Jain

Growth in the alternative side of the business Direct
Our alternatives platform has been building traction and continues to grow. We have strengthened our investment capabilities in this space, including bringing on board a dedicated team to drive upcoming AIF initiatives... Last year, we closed our first category II AIF, Fund of Funds of around Rs.1,200 crores and are now in the market with our performing credit fund, which has seen a promising start to fundraising.

Details the progress and strategic focus on the alternative investment segment, including specific AIF fund size and future plans.

Asked by Prayesh Jain

Strength of SIP numbers despite negative NIFTY50 returns Direct
First and foremost is the long-term track record... Second is the transparency... Third, I would say technology has played a big role... And fourth, last but not the least is I think the effort that all of us are putting on investor education, the efforts made by AMFI collectively, collaboratively that we do as an industry.

Explains the underlying factors contributing to the sustained growth in SIPs, highlighting investor maturity, trust, technology adoption, and industry-wide education efforts.

Asked by Madhukar Ladha

Impact of SEBI's reintroduced B30 incentives Partial
Yes, so I mean, we are yet to get the final guidelines on that in what manner and what shape it will be implemented. We heartily welcome SEBI's guidance on that to increase both number of women investors as well as new investors from B30 towns.

Acknowledges the new regulatory incentives for B30 towns but indicates that the company is awaiting final guidelines, suggesting potential future impact but no immediate quantification.

Asked by Mohit Mangal

Pipeline for new NFOs Direct
So, the current product lineup is more or less complete given the SEBI classification and within that the products that are allowed... I mean, many of our existing funds have plenty of room to grow. So, our focus is on strengthening their position and scale.

Clarifies that while the core product lineup is largely complete, the focus is on scaling existing funds and selectively launching new products based on investor fit and investment team conviction, rather than market fads.

Asked by Mohit Mangal

Employee cost and ESOP amortization Direct
The non-cash expense on account of ESOPs only I am talking. For the second half of this year would be around Rs.42 crores, for FY27 we think it is about Rs.67 crores, for FY28 Rs.53-odd crores, then it tails off, FY29 about Rs.33 crores and it tails off after that.

Provides specific, multi-year guidance on the non-cash ESOP amortization expense, crucial for modeling future profitability.

Asked by Abhijit Sakare

Launch of new SIF plans Partial
So, we already have approvals in place for launch of SIF. We want to be full service providers across categories, say active, passive, alternatives, and even the newer categories as they emerge. We are watching this space closely and we will decide on how we want to progress on this front.

Confirms regulatory approval for SIFs and the company's intent to participate, but indicates a cautious, strategic approach to market entry rather than an immediate launch.

Asked by Vinod Rajamani

2 min read 7 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

HDFC AMC reported strong financial results for Q2 FY26, with revenue from operations growing 16% year-on-year to ₹10,260 million. Operating profit also saw a 13% YoY increase, reaching ₹7,796 million. Profit after tax (PAT) stood at ₹7,179 million, which included a ₹468 million reversal of income tax provision from earlier periods; without this, PAT would have been ₹6,711 million.

AUM Growth and Market Share

The company's Assets Under Management (AUM) reached ₹8.7 trillion by the end of the quarter, reflecting an overall market share of 11.5% and 12.8% on an ex-ETF basis. Actively managed equity-oriented AUM grew to ₹5.4 trillion, holding a 12.9% market share. HDFC AMC maintained its position as the preferred choice among individual investors with a 13.1% market share, and total AUM has since crossed the ₹9 trillion mark.

Robust SIP Inflows and Investor Base Expansion

Systematic Investment Plan (SIP) contributions continued their strong trajectory, reaching ₹294 billion for September 2025. The quarter saw a net addition of 6 million contributing SIP accounts, reflecting growing investor maturity and long-term orientation. The total investor base expanded to 14.5 million unique investors, representing a healthy 25% penetration.

Product Launches and Asset Mix

During the quarter, HDFC AMC launched two new fund offerings (NFOs): 'HDFC Innovation Fund' which collected ₹24 billion, and 'HDFC Diversified Equity All Cap Active FoF' which collected ₹11 billion. The asset mix continued to shift towards equity, with the equity proportion rising to 64.9% on a Quarterly Average AUM (QAAUM) basis. The company also has approvals in place for the launch of SIFs and is evaluating its approach.

Cost Management and ESOP Impact

Total expenses for the quarter were ₹2,464 million, including a non-cash charge of ₹211 million for ESOPs and PSUs. Management indicated that sustainable annual OPEX growth is expected to be between 12% and 15%. Specific non-cash ESOP amortization expenses were guided as ₹42 crores for H2 FY26, ₹67 crores for FY27, and ₹53 crores for FY28, tailing off thereafter.

Strategic Initiatives and Future Growth

The company is actively investing in expanding its physical presence, opening 50 new offices in B30 towns, and enhancing digital assets and technology for improved investor and partner experience. Significant focus is also on growing the alternative investment platform, including AIFs and PMS, and expanding international business through its GIFT City subsidiary and partnership with UBS Asset Management. The company is awaiting final guidelines on SEBI's reintroduced B30 incentives.

Bonus Share Issue

The Board of Directors approved a 1:1 bonus share issue, subject to shareholder approval, signaling confidence in the company's performance and future outlook.

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