Market Rally and Treasury Rebound Drive Q1 Growth for Indian AMCs

Leading asset management companies (AMCs) posted a 12% to 27% year-on-year increase in profit after tax (PAT) for the first quarter. Individual performances include

with a 23% rise to ₹964 crore, growing 12% to ₹838 crore, and leading the growth with a 27% surge to ₹503 crore. Equity Market Surge Boosts Fee Income: A strong rebound across broad equity indices—with the Nifty 50 gaining 6.9%, the Nifty Midcap 150 rising 17%, and the Nifty Smallcap 250 jumping 24%—significantly expanded mutual fund assets under management (AUM). Because AMCs earn fees as a percentage of total AUM, these mark-to-market valuations naturally boosted revenue even without accounting for new client inflows. Rebound in Treasury Gains and Other Income: Following a sluggish preceding quarter where treasury investments registered losses or sharp declines, other income rebounded strongly in Q1. HDFC AMC saw other income rise to ₹262 crore, ICICI Prudential AMC reached ₹180 crore, and Nippon Life India AMC recorded ₹170 crore, providing crucial tailwinds to overall reported profitability. Divergence Between Reported and Core Profits: While reported quarter-on-quarter profit figures showed massive jumps, core PAT—which strips out non-operational treasury gains—revealed underlying operational softness. For instance, HDFC AMC’s core PAT increased by only 3.5% sequentially, while Nippon AMC (-9.3%), ICICI Prudential AMC (-0.7%), and Aditya Birla Sun Life AMC (-13.7%) all saw sequential declines in core earnings. Slight Moderation in Sequential SIP Inflows: Despite strong overall AUM gains driven by market performance, retail inflows through Systematic Investment Plans (SIPs) experienced a mild quarter-on-quarter slowdown. Nippon AMC’s SIP asset base eased slightly to ₹31,800 crore, while ICICI Prudential AMC saw monthly SIP and STP inflows contract to ₹4,872 crore from ₹5,104 crore in the prior quarter.