Yes, this seems to be the case. AUM growth may not translate much into PAT growth due to regulatory norms to reduce Expense ratios, Investors moving to Index Funds and many such reasons.
Also, I personally believe that, for various reasons (mostly known to all), Indian GDP and Per Capita GDP is not actually growing as per its true potential. With such a large population of earners in the age group of 25 to 40 years, Growth in people’s real income seems to be negligible.
Focus on improving productivity of large population, good and fast transportation facilities, transparent governance are those areas which need to improve so that, productivity of population can improve translating into much more growth in GDP and also Per Capita GDP. This area seems to be often neglected which is an essential ingredient to lift the income of people which can increase Saving rate (which is currently at the lowest in past 3 decades).
Once the Saving rate is increased, there is potential to see high rise in AUM growth much above current 10% to 12% low to moderate growth in Equity AUM.
Disc : Invested in HDFC AMC with moderate expectations.
I may be wrong in my analysis.
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