Capitaline

Results 31-Oct-23

Analysis

Nippon Life India Asset Management

AUM jumps 23%

Nippon Life India Asset Management has posted strong 19% increase in the net profit to Rs 244.41 crore in the quarter ended September 2023 (Q2FY2024). The income from operation of Nippon Life India Asset Management increased 19.88% to Rs 397.48 crore in Q2FY2024. Overall OPM has increased to 60.73% in Q2FY2024 from 58.36% in Q2FY2023, leading to 24.74% rise in operating profit to Rs 241.39 crore. Other expenditure as a percentage of total income moved up to 19.17% from 18.56% in Q2FY2024. The staff cost as a percentage of total income declined to 20.10% from 23.07% in Q2FY2024.

Other income declined 4.91% to Rs 77.88 crore. Interest cost increased 113.92% to Rs 1.69 crore. Depreciation moved up 1.55% to Rs 7.19 crore. PBT moved up 16.01% to Rs 310.39 crore.

The effective tax rate declined to 21.31% in Q2FY2024 compared to 22.99% in Q2FY2023. .Provision for tax was expense of Rs 66.14 crore, compared to Rs 61.51 crore. Profit after tax rose 18.54% to Rs 244.25 crore.

Profit attributable to non-controlling interest was nil in both the periods. The share of profit of associate companies increased 433.33% to Rs 0.16 crore. Finally, Net profit attributable to owners moved up 18.61% to Rs 244.41 crore.

Book value of the company stood at Rs 57.1 per share end September 2023.

The company has also declared an interim dividend of Rs 5.50/- per equity share.

Business highlights:

NAM India’s assets under management stood at Rs 4.35 trillion end September 2023.

NIMF’s average assets under management stood at Rs 3.51 trillion for Q2FY2024 - an increase of 23.0% YoY and 11.8% QoQ.

The share of Equity Assets rose to 46.8% of NIMF’s AUM as against 43.5% end September 2022

NIMF has one of the largest retail assets in the Industry, at Rs 109900 crore. Retail assets contributed 30% to NIMF’s AUM vs Industry average of 26%

High Networth Individual (HNI) AUM at Rs 99500 crore - up by Rs 29300 crore YoY, +14.1% QoQ & market share growth of 32 bps QoQ

Individual AUM (Retail + HNI) was Rs 209400 crore - an increase of 14.0% QoQ. This segment contributed 58% to NIMF’s AUM

NIMF’s AUM from ‘Beyond the Top 30 cities’ (B-30) stood at Rs 71900 crore - an increase of 13.9% QoQ. This segment forms 19.9% of NIMF’s AUM vis-à-vis 17.5% for the Industry

NIMF’s systematic book rose by 37.6% QoQ to Rs 4720 crore. This increase resulted in an annualised systematic book of over Rs 20800 crore.

NIMF is one of the largest ETF players with AUM of Rs 80800 crore and a market share of 14.02%

Nippon India AIF offers Category II and Category III Alternative Investment Funds and has a total commitment of Rs 5780 crore across various schemes

NIMF has geographical presence at 265 locations pan India, and is amongst the highest in the industry

Digital purchase transactions rose to 2.55 million in H1FY24, up from 1.51 million in the same period last year. Digital channel contributed 56% to total new purchase transactions

Sundeep Sikka, ED & CEO, NAM India, said “We continue to witness an uptick in overall market share, driven by gains across most asset classes – with a strong increase in equity market share. We are humbled to have the trust of 14.6 million unique investors i.e. 1 in every 3 mutual fund investors - highest in the Industry. We will continue to focus on sustainable profitable growth for shareholders by growing both the Mutual Fund and non-Mutual Fund businesses.”

Financial Performance H1FY2024

The income from operation of Nippon Life India Asset Management increased 16.05% to Rs 751.63 crore in H1FY2024. Overall OPM has increased to 59.05% in H1FY2024 from 57.53% in H1FY2023, leading to 19.12% rise in operating profit to Rs 443.83 crore. Other expenditure as a percentage of total income moved up to 19.95% from 18.61% in H1FY2024. The staff cost as a percentage of total income declined to 21% from 23.87% in H1FY2024.

Other income increased 198.83% to Rs 194.75 crore. Interest cost increased 72.25% to Rs 2.98 crore. Depreciation moved up 10.01% to Rs 15.28 crore. PBT moved up 46.95% to Rs 620.32 crore.

The effective tax rate declined to 22.68% in H1FY2024 compared to 24.11% in H1FY2023. Provision for tax was expense of Rs 140.7 crore, compared to Rs 101.76 crore. Profit after tax rose 49.70% to Rs 479.62 crore. Profit attributable to non-controlling interest was nil in both the periodsFinally, Net profit attributable to owners rose 49.97% yoy to Rs 480.13 crore in H1FY2024.

Nippon Life India Asset Management: Consolidated Results
	2309 (3)	2209 (3)	Var %	2309 (6)	2209 (6)	Var %	2303 (12)	2203 (12)	Var %
Sales	397.48	331.57	20	751.63	647.67	16	1349.82	1306.64	3
OPM %	60.7	57.2		5904.9%	5752.8%		58.9	60.5
OP	241.39	193.52	25	443.83	372.59	19	794.71	790.72	1
Other Income	77.88	81.90	-5	194.75	65.17	199	166.79	228.99	-27
PBDIT	319.27	275.42	16	638.58	437.76	46	961.50	1019.71	-6
Interest	1.69	0.79	114	2.98	1.73	72	3.97	3.82	4
PBDT	317.58	274.63	16	635.60	436.03	46	957.53	1015.89	-6
Depreciation	7.19	7.08	2	15.28	13.89	10	29.79	27.22	9
PBT	310.39	267.55	16	620.32	422.14	47	927.74	988.67	-6
Tax	66.14	61.51	8	140.70	101.76	38	204.81	245.30	-17
PAT	244.25	206.04	19	479.62	320.38	50	722.93	743.37	-3
Minority interest	0.00	0.00	-	0.00	0.00	-	0.00	0.00	-
Profit/Loss of Associate Company	0.16	0.03	433	0.51	-0.23	LP	0.40	0.79	-49
PAT	244.41	206.07	19	480.13	320.15	50	723.33	744.16	-3
EPS (Rs)*	15.6	13.2		15.4	10.2		11.6	11.9
EPS is annualized on latest equity of Rs 624.79 crore, face value of Rs 10 each, PL: Profit to Loss, LP: Loss to Profit* Source: Capitaline Corporate Database

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