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Prabhudas Lilladher Report
Industry monthly average assets under management as at May 2023 stood at Rs 42.95 trillion of which equity/debt share was 38.6%/19.5%. Excluding new fund offers, April 2023 and May-23 combined, saw equity net flows of Rs 66.9 billion compared to Rs 388.1 billion in Q4 FY23 as Q4 is usually stronger partly due to equity-linked savings scheme flows.
Net equity flows in Q1 FY24 are expected to be softer QoQ as-
redemptions are higher when equity markets perform well and
debt is expected to provide superior returns as interest rates have peaked, which may translate to higher debt flows.
As anticipated, debt is witnessing a trend reversal since March-23; total outflows over April-22 to February 2023 were Rs 1.84 trillion while March-23 to May-23 saw net inflows of Rs 608 billion.
As equity market has done well in Q1 FY24 (+11.9%), we expect companies in our coverage to see better overall/equity quarterly average assets under management growth at 1.6%/5.8% QoQ (versus 0.4%/0.5% in Q4 FY23).
QAAuM growth for HDFC Asset Management Company Ltd. would be superior to UTI Asset Management Company Ltd. owing to better equity performance, although UTI AMC could see sharper QoQ growth in core income as in the last quarter had seen some one-offs. Core profit after tax yields may enhance 1.2 basis points QoQ to 11 bps.
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