Capitaline

Results 27-Jul-23

Analysis

Nippon Life India Asset Management

AUM growth accelerates to 12%

Nippon Life India Asset Management has posted strong 107% increase in the net profit to Rs 235.72 crore in the quarter ended June 2023 (Q1FY2024). The income from operation increased 12.04% to Rs 354.15 crore in Q1FY2024. Overall OPM has increased to 57.16% in Q1FY2024 from 56.65% in Q1FY2023, leading to 13.05% rise in operating profit to Rs 202.44 crore. Other expenditure as a percentage of total income moved up to 20.82% from 18.65% in Q1FY2024. The staff cost as a percentage of total income declined to 22.02% from 24.70% in Q1FY2024.

Other income was credit of Rs 116.87 crore compared to debit of Rs 16.73 crore. Interest cost increased 37.23% to Rs 1.29 crore. Depreciation moved up 18.80% to Rs 8.09 crore. PBT moved up 100.49% to Rs 309.93 crore.

The effective tax rate declined to 24.06% in Q1FY2024 compared to 26.04% in Q1FY2023. .Provision for tax was expense of Rs 74.56 crore, compared to Rs 40.25 crore. Profit after tax rose 105.85% to Rs 235.37 crore.

Profit attributable to non-controlling interest was nil in both the periods.Finally, Net profit attributable to owners moved up 106.63% to Rs 235.72 crore.

Book value of the company stood at Rs 60.2 per share end June 2023.

Business highlights:

NAM India’s assets under management stood at Rs 4.04 lakh crore. NIMF’s average assets under management stood at Rs 3.14 lakh crore - an increase of 12.2% YoY and 7.0 QoQ

For the quarter ended June 2023, share of Equity Assets rose to 44.5% of NIMF’s AUM as against 41.8% as on June 30, 2022

NIMF has one of the largest retail assets in the Industry, at Rs 96500 crore. Retail assets contributed 30% to NIMF’s AUM vs Industry average of 25%

High Networth Individual (HNI) AUM at Rs 87200 crore – up by Rs 24600 crore YoY, +12.9% QoQ & market share growth of 19 bps QoQ

Individual AUM (Retail + HNI) was Rs 183700 crore - an increase of 13.0% QoQ. This segment contributed 56% to NIMF’s AUM

NIMF’s AUM from ‘Beyond the Top 30 cities’ (B-30) stood at Rs 63100 crore - an increase of 13.4% QoQ. This segment forms 19.3% of NIMF’s AUM against 16.9% for the Industry

NIMF’s systematic book rose by 9.6% QoQ to Rs 1220 crore. This increase resulted in an annualised systematic book of over Rs 1467 crore.

NIMF is one of the largest ETF players with AUM of Rs 73800 crore and a market share of 13.86%

Nippon India AIF offers Category II and Category III Alternative Investment Funds and has a total commitment of Rs 5750 crore across various schemes

NIMF has geographical presence at 270 locations pan India, and is amongst the highest in the industry

Digital purchase transactions rose to 1.06 mn in Q1 FY24, up from 0.75 mn in the same quarter last year. Digital channel contributed 57% to total new purchase transactions.

Sundeep Sikka, ED & CEO, NAM India, said “We witnessed an improvement in overall market share, driven by gains across asset classes (barring liquid). Equity market share, which had been stable over the past few quarters has now started to improve. We are honoured and privileged to have the trust of 14.1 mn unique investors i.e. 1 in every 3 mutual fund investors - highest in the Industry. We will continue to do what is right for the investor with sustainable profitable growth for shareholders. We will continue to build our business going forward - on the pillars of brand, distribution, performance, people, processes, and trust.”

Financial Performance FY2023

The income from operation rose 3.30% to Rs 1349.82 crore in FY2023. Overall OPM eased to 58.88% in FY2023 from 60.52% in FY2022, leading to 0.50% rise in operating profit to Rs 794.71 crore. Other expenditure as a percentage of total income moved up to 18.87% from 17.27% in FY2023. The staff cost as a percentage of total income increased to 22.26% from 22.22% in FY2023.

Other income declined 27.16% to Rs 166.79 crore. There is 3.93% rise in interest cost at Rs 3.97 crore and 9.44% rise in depreciation to Rs 29.79 crore, Profit before tax fell 6.16% to Rs 927.74 crore. There is no extraordinary item. After which, PBT moved down 6.16% to Rs 927.74 crore.

The effective tax rate declined to 22.08% in FY2023 compared to 24.81% in FY2022. Provision for tax was expense of Rs 204.81 crore, compared to Rs 245.3 crore. Profit after tax fell 2.75% to Rs 722.93 crore.

Profit attributable to non-controlling interest was nil in both the periods. The share of profit of associate companies decreased 49.37% to Rs 0.4 crore. Finally, Net profit attributable to owners fell 2.80% yoy to Rs 723.33 crore in FY2023.

Nippon Life India Asset Management: Consolidated Results
	2306 (3)	2206 (3)	Var %	2303 (12)	2203 (12)	Var %
Sales	354.15	316.10	12	1001.48	968.67	3
OPM %	57.16	59.95		0.59	0.60
OP	202.44	179.07	13	585.87	582.81	1
Other Income	116.87	-16.73	LP	127.10	194.52	-35
PBDIT	319.31	162.34	97	712.97	777.33	-8
Interest	1.29	0.94	37	2.81	2.71	4
PBDT	318.02	161.40	97	710.16	774.62	-8
Depreciation	8.09	6.81	19	21.63	20.33	6
PBT	309.93	154.59	100	688.53	754.29	-9
Tax	74.56	40.25	85	163.34	185.76	-12
PAT	235.37	114.34	106	525.19	568.53	-8
Minority interest	0.00	0.00	-	0.00	0.00	-
Profit/Loss of Associate Company	0.35	-0.26	-235	0.12	0.78	-85
PAT	235.72	114.08	107	525.31	569.31	-8
EPS (Rs)*	15.13	7.32		11.24	12.18
EPS is annualized on latest equity of Rs 623.30 crore, face value of Rs 10 each, LP: Loss to Profit, PL: Profit to Loss* Source: Capitaline Corporate Database

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