Auditor resigned, can it impact to stock quality?

HDFC AMC –

Q2 FY 25 Concall and results highlights –

MF Industry Data –

MF Industry’s closing AUM on 30 Sep 24 @ 67.1 lakh cr vs 46.6 lakh cr on 30 Sep 23 ( up 44 pc !!! )

Out of this, Equity AUM @ 39.9 lakh cr vs 24.8 lakh cr ( percentage of Equity AUM vs Total Industry AUM @ 59 vs 53 pc – again, massive growth )

Retail AUM @ 43 lakh cr vs 29 lakh cr

Institutional AUM @ 26 lakh cr vs 20 lakh cr

T-30 ( Top 30 cities ) AUM @ 56 vs 40 lakh cr
B-30 ( Beyond top 30 cities ) AUM @ 13 vs 9 lakh cr

Sep 24 SIP flows @ 24.5k cr vs 16.1k cr in Sep 23 ( again – massive YoY growth ). HDFC AMC’s SIP book in Sep 24 @ 3.6k cr vs 2.24k cr in Sep 23

Industry wide SIP AUMs @ 13.8 vs 8.7 lakh cr YoY

HDFC AMC’s AUM on 30 Sep @ 7.6 lakh cr vs 5.3 lakh cr on Sep 23 ( up 47 pc !!! ). Their mkt share @ 11.5 vs 11.2 pc

HDFC AMC is not a big player in the ETFs segment. Minus the ETFs, their mkt share is 12.9 pc vs 12.6 pc YoY

HDFC AMC’s equity AUM @ 4.87 lakh cr – mkt share @ 12.7 pc ( AUM up 62 pc YoY )

HDFC AMC’s Debt AUM @ 1.53 lakh cr – mkt share @ 13.4 pc ( AUM up 15 pc YoY )

HDFC AMC’s Liquid AUM @ 0.65 lakh cr – mkt share @ 13 pc ( AUM up 18 pc YoY )

Company’s Retail AUM @ 71.4 pc vs 61.9 pc for the Industry

Number of retail accounts with the company @ 2.06 cr vs 1.34 cr in Sep 23

Company’s mkt share in retail segment is 13.2 pc – highest in the Industry. No2,3,4 players mkt share stands @ 12.9 pc, 12.7 pc and 8.1 pc respectively

Q1 FY 25 financial outcomes –

Revenues – 877 vs 643 cr, up 38 pc
EBITDA – 704 vs 482 cr, up 46 pc ( margins @ 79 vs 75 pc )
Other Income – 171 vs 122 cr
PAT – 577 vs 438 cr, up 31 pc ( due increased tax rate )

89 pc of company’s investors have registered their SIPs for > 5 yrs

Company has set up a fully owned subsidiary at GIFT city – dedicated to attract NRI investments into India ( launching a total of 4 products under this subsidiary – to start with )

SEBI has given a green signal to new a new asset class that sits between a MF and PMS with a min ticket size of 10 lakhs. It ll have more flexibility wrt use of derivatives, limits on single stock ownerships, selection across mkt caps etc. This augurs well for the company as it opens up new opportunities

Company’s mkt share in the incremental fund flows is higher than their mkt share on their existing book – a key positive

Yeild on Equity, Debt, Liquid funds stands @ 68 bps, 28 bps and 13 bps respectively

B-30 cities are showing increased growth rates vs T-30 cities wrt new SIP creations, addition of new investor folios

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

The war is for CASA and to be more specific, granular retail CASA because its 1. Low cost and 2. Sticky. The avg FD value is many multiples that of the SA balance for the same customer which makes it rate sensitive. FDs are a rate play and with no/ minimal premat charges, customers move if they get a higher rate elsewhere. The same customer doesn’t move the SA balance because the rate differential impact is lower due to the smaller ticket size. A granual retail book is sticky which makes it great for banks to manage the asset liability balance and secures their book from massive swings unless there’s a run on the bank. This is why CASA ratio and especially retail CASA is such a key metric when studying banks. You also see this in customer category with senior citizens, NRIs and Corporate salary accounts being the moat sought after as they are sticky in nature.

Fwiw, RBI publishes the total deposits held by banks across the 3 categories every quarter. I haven’t tracked it in ages but one can check the growth of SA, CA and FD there. I’ll be surprised if FD isn’t the fastest growing and that’s the problem banks are facing.

Agree on the broader point about deposits being hit due to the equity boom being nonsense by the way. It’s just a convenient story but doesn’t hold much weight.

Yes. Even I am surprised. Collection ratio and NPAs are the only missing pieces.