Q1 earnings: Market rebound to power up AMCs in the June quarter-OxBig News Network

The equity AUM for all the asset managers jumped 14% sequentially to ₹32.69 trillion in the first quarter of 2025-26, as shown by data from the Association of Mutual Funds in India (Amfi).

AMCs earn money by charging a small fee—called the expense ratio—on the total assets they manage, meaning their revenues rise when the value of their assets (AUM) goes up.

HDFC Asset Management Co. Ltd, Nippon Life India Asset Management Ltd, and Aditya Birla Sun Life Amc Ltd are expected to see their revenues grow 21%, 26%, and 14% year-on-year, respectively, according to Bloomberg consensus estimates for the quarter. For UTI Asset Management Co. Ltd, revenue is expected to decline by 22%.

“The strong growth is (coming) on the back of increasing retail participation, improving product mix, and rising equity market levels,” said Vaqarjaved Khan, team lead-fundametal equities, at stockbroker Angel One Ltd.

The rise in total industry AUM is mainly driven by equity-linked schemes and efficient distribution networks, he added.

However, according to Amfi data, equity inflows witnessed a sequential decline of 28.92% in the April-June quarter.

The decline indicates some moderation in investor sentiment. However, it is important not to view this decline in isolation, as this drop in inflows is largely due to heightened market volatility, global uncertainties, and cautious investor behaviour amid volatile markets, said Shweta Rajani, head-mutual funds, Anand Rathi Wealth Ltd.

HDFC Asset Management Co. Ltd, Nippon Life India Asset Management Ltd, and Aditya Birla Sun Life Amc Ltd are expected to see their revenues grow 21%, 26%, and 14% year-on-year, respectively, according to Bloomberg consensus estimates for the quarter. For UTI Asset Management Co. Ltd, revenue is expected to decline by 22%.

“The strong growth is (coming) on the back of increasing retail participation, improving product mix, and rising equity market levels,” said Vaqarjaved Khan, team lead-fundametal equities, at stockbroker Angel One Ltd.

The rise in total industry AUM is mainly driven by equity-linked schemes and efficient distribution networks, he added.

However, according to Amfi data, equity inflows witnessed a sequential decline of 28.92% in the April-June quarter.

The decline indicates some moderation in investor sentiment. However, it is important not to view this decline in isolation, as this drop in inflows is largely due to heightened market volatility, global uncertainties, and cautious investor behaviour amid volatile markets, said Shweta Rajani, head-mutual funds, Anand Rathi Wealth Ltd.

Despite short-term market volatility and uncertainty during the initial part of the quarter, the strong market rebound in the last two months is likely to support a strong earnings performance for AMCs in Q1FY26, she added.

The benchmark Nifty 50 rose 10.15% and the Sensex gained 9.97% during the three months ended 30 June 2025.

Profits

HDFC AMC’s net profit is expected to increase 12.31% on-year, Nippon Life India Asset Management’s 3%, and Aditya Birla Sun Life AMC’s 13.19% in the quarter, according to Bloomberg consensus estimates.

Despite tightened regulatory oversight around futures and options (F&O) trading possibly affecting market volumes, the steady rise in systematic investment plans (SIPs) for mutual funds is supporting profitability across the industry, said Raj Gaikar, research analyst at stockbroker Samco Securities.

June saw the highest-ever SIP contributions at 27,269 crore, showed Amfi data.

“Net profit growth is estimated in the range of high teens to low twenties on an on-year basis, largely driven by a favourable asset mix with equities forming a greater share of total AUM,” Gaikar added.

He said margins are expected to be stable with a slight upward bias, supported by revenue growth and relatively contained cost structures in Q1FY26. However, increased competition and regulatory costs may limit margin expansion.

Assets

Quarterly average AUM for listed AMCs such as HDFC AMC, Nippon AMC, and UTI AMC are expected to rise by 7%, 10%, and 6% on-quarter, respectively, Nomura said in the 15 July report, citing their AUM disclosures.

The equity quarterly average AUM for HDFC AMC grew 8%, Nippon AMC grew 9%, and UTI AMC grew 5% on-quarter, the report added.

AMCs will start reporting earnings for Q1FY26 from 17 July, with HDFC AMC being the first one to declare the results.

Outlook

For the next three years, AUM across schemes is expected to record a compound annual growth rate (CAGR) of 18-20%, but equity-linked schemes are expected to see higher growth of around 22-25%, said Khan.

Growth in AUM is expected to be driven by increasing participation through SIPs, penetration of financial products beyond the top 30 cities, and the rise of high-net-worth individuals and mass affluent populations.

All these factors are expected to improve return on equity (RoE) across industry market leaders by 200-400 basis points over the next 2-3 years, Khan added.

Gaikar said looking ahead, the medium-term outlook for the AMC industry remains constructive, supported by strong domestic savings, increasing financial literacy, and digital penetration. However, regulatory changes and market volatility will need close monitoring.