HDFC AMC — Q3 FY26 earnings call

Call held 16 Jan 2026

Management summary

HDFC AMC reported a strong Q3 FY26 with total AUM crossing INR9 trillion and PAT growing 20% year-on-year to INR7,701 million. The company maintained a healthy operating margin of 36 basis points despite industry-wide telescopic pricing pressures, attributed to disciplined cost management. Record monthly SIP inflows of INR310 billion and growth in PMS and alternative segments highlight robust business momentum, though regulatory changes and a slight dip in liquid segment market share present areas for continued focus.

Highlights

  • Total AUM crossed INR9 trillion, with equity-oriented AUM exceeding INR6 trillion.

  • Operating revenue grew 15% Y-o-Y to INR10,743 million.

  • Profit after tax (PAT) grew 20% Y-o-Y to INR7,701 million.

  • Monthly SIP inflows reached a record INR310 billion in December 2025.

  • PMS AUM crossed INR50 billion, and structured credit fund raised INR13 billion in commitments.

Concerns

  • Potential negative impact from new regulatory changes (5 bps TER reduction, revised expense ratio construct, brokerage limits) on larger schemes.

  • Decline in liquid segment market share from 13-13.5% to around 11%.

  • Telescopic pricing impact on margins, though managed through cost control.

Key financials

3 periods

Headline

  • Total AUM
    90,00,000 Mn
  • Equity-oriented AUM
    60,00,000 Mn
  • Total Revenue
    12,332 Mn
  • Operating Revenue
    10,743 Mn
    YoY +15%
  • Operating Profit
    8,557 Mn
  • Operating Margin
    36 bps
    QoQ +1%
  • PAT
    7,701 Mn
    YoY +20%
  • PMS AUM
    50 Bn
  • Structured Credit Fund Commitments
    13 Bn
  • Equity Yield
    56 bps
  • Debt Yield
    27 bps
  • Liquid Yield
    12 bps

Q3 FY26

  • Blended Yield
    45 bps

9M FY26

  • Blended Yield
    46 bps

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.

Capital allocation

high confidence
  • Liquidity Liquidity disclosed The company has committed around 14% of the corpus of the structured credit fund from its balance sheet. Non-cash expense on account of ESOPs for the full year is about INR68 crores, and for the first 9 months, it's about INR47 crores.
    Our dividend payouts for the last two years have been almost close to the entire post-tax cash profits that we generate as a business, we have paid out. That's what the Board has done for the last two financial years. We have also used capital to good effect to seed our alternate platforms... company has meaningfully committed around 14% of the corpus committed by the balance sheet of the company. So, the noncash expense on account of ESOPs for the full year would be about INR68 crores. For the first 9 months, it's about INR47 crores.

Guidance & targets

Profitability

  • Operating Margin Band Profitability · Ongoing · High confidence 33-36 bps
    But as I mentioned earlier that despite the impact of telescopic pricing, we have managed to keep our margins in the 33 to 36 basis point range. That reflects like disciplined cost management as well as the operating leverage. And you asked like going forward, so we continue to work hard to maintain margins within this band.

    — Navneet Munot

Business Growth

  • Overall Industry Growth Business Growth · next several years · Low confidence very optimistic
    And I feel very optimistic on the overall industry growth for next several years.

    — Navneet Munot

  • Asset Management Industry Growth (India) Business Growth · next several years · Medium confidence significant growth
    I think over the next several years, we are going to see significant growth in asset management.

    — Navneet Munot

AUM Market Share

  • Increased AUM Market Share (HDFC Bank channel) AUM Market Share · over a period of time · Medium confidence increased AUM market share over time
    So, this, in my opinion, will lead to increased AUM market share over time, because the SIP buildup will only show over a period of time, but this aligns very well with our long-term objective.

    — Navneet Munot

What to watch in Q4 FY26

Operating Margin

Next quarter
Current 36 bps (Q3 FY26)
Target Maintain within 33-36 bps band

Why it matters

Sustained profitability is key for AMCs, and maintaining margins despite industry pressures (telescopic pricing, regulatory changes) is a critical indicator of operational efficiency.

But as I mentioned earlier that despite the impact of telescopic pricing, we have managed to keep our margins in the 33 to 36 basis point range. That reflects like disciplined cost management as well as the operating leverage. And you asked like going forward, so we continue to work hard to maintain margins within this band.

Risks & concerns

  • Telescopic Pricing Impact on Margins

    medium

    Sliding scale TER structure leads to lower expense ratios as AUM scales, causing margin compression. Management aims to maintain margins within 33-36 bps band through disciplined cost management.

    Management acknowledged, managed through cost control

  • New Regulatory Changes (TER reduction, expense construct, brokerage limits)

    medium

    Removal of 5 bps additional TER, revised expense ratio construct, and rationalization of brokerage limits will impact larger schemes, potentially reducing TER. Management is evaluating ways to contain financial impact.

    Management acknowledged, evaluating mitigation strategies

  • Fund Manager Transition

    low

    Departure of a key fund manager (Roshi) and subsequent reallocation of schemes. Management highlighted the return of an experienced manager (Amar Kalkundrikar) and the overall strength and long track record of the investment team.

    Analyst downplayed, emphasized team strength

  • Volatility in Liquid Segment Market Share

    low

    Decline in liquid segment market share from 13-13.5% to around 11%. Management attributes this to movements by large corporate investors or institutions and does not read much into it.

    Analyst acknowledged, attributed to large institutional movements

Q&A highlights

7 direct
Operating Profit Margin Expansion Drivers Direct
That's largely because other expenses were lower for this quarter. Previous quarter, we had a larger expenditure on CSR. Also, certain marketing, business and promotion expenditure was slightly more in the previous quarter as compared to this quarter.

Clarifies the drivers behind the 1 bp QoQ increase in operating profit margin, attributing it to lower other expenses and marketing spend compared to the previous quarter.

Asked by Kushagra Goel

Impact of Telescopic Pricing and Regulatory Changes on Yields/Margins Direct
So, on the equity margins, I mentioned that some degree of compression is inevitable over time because you have a sliding scale structure of TER, so which naturally leads to lower expense ratio as the AUM scales... But as I mentioned earlier that despite the impact of telescopic pricing, we have managed to keep our margins in the 33 to 36 basis point range.

Addresses a critical industry-wide challenge (telescopic pricing) and how the company plans to maintain profitability through cost management, while acknowledging inevitable compression.

Asked by Devesh Agarwal

Specifics of New Regulatory Changes and Financial Impact Direct
Firstly, removal of 5 basis points of additional TER, which AMCs were allowed to charge in lieu of exit load... Second change, in the expense ratio construct... Lastly, third thing is the rationalization of brokerage limits... we are evaluating the way forward with an objective to contain the financial impact, if any.

Provides a detailed breakdown of three significant regulatory changes and management's strategy to mitigate their financial impact, noting that larger schemes will be more affected.

Asked by Devesh Agarwal

Fund Manager Transition and Investment Team Strength Direct
you would also know Amar Kalkundrikar who joined us a few months back. He was with us for over 15 years, left us for a few years and has come back as Senior Fund Manager... we have one of the most experienced investment team in the industry.

Addresses concerns about the departure of a fund manager (Roshi) by highlighting the return of an experienced manager and the overall strength and depth of the investment team.

Asked by Devesh Agarwal

Capital Efficiency and Deployment Priorities Direct
From a deployment of capital towards digital, I think that's an ongoing process... Our dividend payouts for the last two years have been almost close to the entire post-tax cash profits that we generate as a business, we have paid out... We have also used capital to good effect to seed our alternate platforms.

Explains the company's capital allocation strategy, focusing on digital investments, consistent dividend payouts, and seeding alternative investment platforms.

Asked by Sucrit D. Patil

Impact of Fund Manager Transition on Flows and Distributor Sentiment Partial
But at the same time, the strategies that were managed by him, some of them are the ones which have seen the highest growth at our end in last couple of years. And the overall team's experience, the pedigree, the overall quality of our research... I don't have to overemphasize on that.

Addresses concerns about potential negative impact on fund flows and distributor sentiment following a key fund manager's departure, with management emphasizing the robustness of the overall investment team and processes.

Asked by Dipanjan Ghosh

Passive Segment Growth Drivers and Outlook Direct
I mean a large part of that growth is from some of the institutional mandates... And recently, we have seen a significant growth in gold and silver ETF and fund of fund... I think over the next several years, we are going to see significant growth in asset management.

Provides insights into the drivers of growth in the passive segment (institutional mandates, gold/silver ETFs) and reiterates a positive long-term outlook for asset management growth in India.

Asked by Divij Punjabi

ESOP Issuance and Cost Direct
So, the noncash expense on account of ESOPs for the full year would be about INR68 crores. For the first 9 months, it's about INR47 crores... The material ESOP issuance happened last year. But as and when additional resources and people join us, we'll have small incremental issuances.

Clarifies the ESOP expense for the current fiscal year and indicates that while there might be small incremental issuances, the material impact was from last year's issuance, providing clarity on non-cash expenses.

Asked by Gaurav Jani

2 min read 7 chapters

Detailed narrative

Strong Financial Performance and AUM Growth

HDFC AMC reported a robust Q3 FY26, with total AUM crossing INR9 trillion and equity-oriented AUM exceeding INR6 trillion, representing an asset mix with equity at 65.5%. Total revenue for the quarter was INR12,332 million, with operating revenue growing 15% year-on-year to INR10,743 million. Profit after tax (PAT) saw a significant 20% year-on-year growth, reaching INR7,701 million.

Healthy Operating Margins and Cost Discipline

The company maintained a strong operating profit of INR8,557 million, translating into an operating margin of 36 basis points for the quarter. Management attributed this resilience to disciplined cost management, noting that lower other expenses and reduced marketing spend compared to the previous quarter contributed to the margin expansion. Despite the impact of telescopic pricing, the company aims to maintain margins within the 33-36 basis point band.

Record SIP Inflows and Investor Growth

Systematic Investment Plans (SIPs) continued to be a key structural driver, with monthly SIP inflows reaching a record INR310 billion in December 2025. The SIP asset base increased to INR16.6 trillion, accounting for over 20% of industry AUM. The company also saw a significant increase in unique investors, adding 2.8 million to reach 15.4 million, representing a 26% penetration.

Expansion in PMS and Alternative Segments

HDFC AMC's PMS business saw its AUM cross INR50 billion during the quarter, with growth in both discretionary and non-discretionary segments. In the alternatives space, the company completed the first close of its structured credit fund, raising commitments of approximately INR13 billion. This fund, anchored by IFC with a INR220 crore contribution, aims to develop the private credit market in India.

Impact of New Regulatory Changes

Management detailed three key regulatory changes: removal of 5 basis points additional TER, revised expense ratio construct, and rationalization of brokerage limits. While smaller schemes might see increased TER, larger schemes are expected to be impacted by a reduction in TER. The company is evaluating strategies to optimize and contain any financial impact, drawing on its experience from similar changes in 2019.

Investment Team Strength and Fund Manager Transition

Addressing concerns about a recent fund manager departure, management highlighted the return of Amar Kalkundrikar as Senior Fund Manager, now managing approximately INR40,000 crores across several funds. The company emphasized the depth and experience of its overall investment team, with senior fund managers having 20-21 years of industry experience, ensuring continuity and strong performance.

Strategic Focus on Digital and Distribution Channels

The company continues to invest in technology and digital platforms to enhance distribution and investor engagement. The HDFC Bank channel remains a critical distribution partner, with HDFC AMC's share of SIP flows through this channel being meaningfully higher than its overall book share. Fintechs are also recognized as a vital distribution channel, having registered 25 million SIPs in the past nine months, with HDFC AMC securing a notable presence on leading platforms.

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