Retail flows hold firm; market volatility drags AMC profits in Q4- Moneycontrol.com
Listed AMCs' Q4 FY26 revenue steady, profits down on market dipRetail inflows and SIPs buoyed revenue amid volatilityETF/passive shift grew as yields and profits faced pressure
Listed asset management companies (AMCs) reported steady revenue growth in Q4 FY26, supported by resilient retail inflows, but a 14-15 percent correction in equity markets weighed on profitability, analysis of earnings call transcripts and results show.
The March quarter was marked by volatility driven by global uncertainty and sustained foreign outflows, which weighed on mark-to-market income, AMC management said in the Q4 analyst calls. Even so, flows held up, led by systematic investment plans that continued to anchor retail participation.
The mutual fund industry's QAAUM rose 21% YoY to Rs 81.5 lakh crore in March 2026, extending its long run of net inflows. Amongst individual AMCs, HDFC AMC's QAAUM grew 20% YoY to Rs 9.3 lakh crore, ICICI Prudential AMC reached Rs 11.05 lakh crore, up 25.6% YoY, and ABSL AMC rose 14%.
This resilience in flows supported revenues across the six listed AMCs, even as lower market levels affected average AUM sequentially. ICICI Prudential Asset Management Company reported revenue of Rs 1,517 crore, up 19.5 percent year-on-year and flat quarter-on-quarter. HDFC Asset Management Company posted Rs 1,051.5 crore, up 16.7 percent year-on-year but down 2.2 percent sequentially.
During the quarter, Nippon Life India Asset Management reported revenue of Rs 738.7 crore, rising 30.4 percent year-on-year and 4.7 percent quarter-on-quarter. Among mid-sized players, Aditya Birla Sun Life Asset Management reported Rs 458.2 crore, up 6.9 percent year-on-year but down 4.2 percent sequentially, while UTI Asset Management Company saw a sharper 24.7 percent sequential decline to Rs 386.5 crore. Canara Robeco Asset Management Company reported Rs 114.2 crore, up 12.8 percent year-on-year and 4.0 percent quarter-on-quarter.
During earnings calls, AMC leaders consistently pointed to improving investor behaviour during volatile markets. HDFC AMC MD and CEO Navneet Munot said the "highest equity inflows came in months of peak volatility," highlighting a clear dip-buying trend. ICICI Prudential AMC management also noted that investors were "putting money in on correction days," with this behaviour continuing beyond March. ABSL AMC CEO A. Balasubramanian added that SIP cancellations remained below elevated industry levels despite volatility, indicating continued commitment from retail investors. Meanwhile, UTI AMC MD and CEO Vetri Subramaniam attributed this resilience to the ongoing financialisation of savings and a younger, more participation-driven investor base.
Shift in flows
Flows continue to shift toward passives, ETFs, and systematic channels, supporting AUM growth but weighing on yields.
Nippon Life India Asset Management has been a key beneficiary, with passive QAAUM rising to 35.2 percent of its mutual fund book from 27 percent two years earlier. ETF QAAUM stood at Rs 2.42 lakh crore, up 57 percent year-on-year and 16 percent quarter-on-quarter, while gold and silver ETFs together reached Rs 0.85 lakh crore, up 23 percent sequentially. Its overall market share rose to 8.89 percent, the highest since June 2019. At UTI Asset Management Company, ETFs and index funds accounted for 48 percent of QAAUM, up from about 34 percent two years earlier. Active equity has declined to 24.5 percent, and net mutual fund yields fell 1.4 basis points quarter-on-quarter to 30.5 basis points.
On the other hand, ICICI Prudential Asset Management Company and HDFC Asset Management Company maintained higher exposure to equity-oriented products. ICICI Prudential's equity and hybrid shares held at about 59 percent of QAAUM, while HDFC AMC's equity mix stood at 67.9 percent, above the industry average of 59.6 percent. This mix was supported by steady SIP inflows, with ICICI Prudential reporting Rs 5,100 crore for the quarter, up from Rs 3,910 crore a year earlier, and HDFC AMC reporting Rs 14,640 crore, up 3.2 percent sequentially.
Profits hit by investment income
While operating performance remained stable, profitability weakened as treasury income turned negative. ICICI Prudential Asset Management Company reported net profit of Rs 763.4 crore, down 16.8 percent quarter-on-quarter, though up 10.4 percent year-on-year. HDFC Asset Management Company reported Rs 622.7 crore, down 19.1 percent sequentially and 2.5 percent year-on-year.
Aditya Birla Sun Life Asset Management reported a net profit of Rs 187.1 crore, down 30.6 percent quarter-on-quarter and 18.0 percent year-on-year, while Canara Robeco Asset Management Company reported Rs 41.4 crore, down 21.6 percent sequentially. UTI Asset Management Company reported a net loss of Rs 51.4 crore compared with a profit a year earlier. On the other hand, Nippon Life India Asset Management reported net profit of Rs 384.5 crore, up 28.9 percent year-on-year, though down 4.8 percent sequentially, supported by stronger operating performance. Its core profit rose 47.3 percent year-on-year to Rs 410 crore.
The decline in reported earnings was largely driven by a sharp swing in other income. ICICI Prudential Asset Management Company reported other income of -negative Rs 89 crore compared with Rs 110 crore in the previous quarter, while HDFC Asset Management Company saw other income fall to Rs 10 crore from Rs 160 crore. Aditya Birla Sun Life Asset Management reported negative Rs 33 crore versus Rs 84 crore, and UTI Asset Management Company reported negative Rs 148 crore.
TER pressure gradual
On Total Expense Ratio, management commentary pointed to a modest but broad-based impact. The shift to a base TER structure and removal of the 5 basis point exit load is expected to reduce yields by about 3-4 basis points. Most AMCs indicated that part of this impact would be passed on to distributors through lower commissions. For example, UTI Asset Management Company said it intends to pass on the full 5 basis point impact, while ICICI Prudential Asset Management Company indicated that discussions were ongoing. The impact is likely to vary, with AMCs having higher direct channel share and less flexibility to offset changes through distribution costs.
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