Revenue
Margin
Demand
Guidance
Tone
Event Participants
Executives
3 A. Balasubramanian, Pradeep Sharma, Paritosh Chittora
Analysts
5 Abhijit Sakhare, Dipanjan Ghosh, Lalit Mohan Deo, Mohit Mangal, Swarnabha Mukherjee
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Closing Total AUM (incl. EPFO) | ₹10 lakh crore+ | Surpassed ₹10 lakh crore milestone on the back of the ~₹6.08 lakh crore EPFO mandate entrusted during the quarter |
| Overall QAAUM (incl. Alternates) | ₹6.28 lakh crore | +42% YoY; crossed ₹6 lakh crore milestone; includes ESIC and EPFO mandates (EPFO in AUM for ~1.5 months of the quarter) |
| Mutual Fund QAAUM | ₹4.28 lakh crore | +6% YoY |
| Equity MF QAAUM | ₹1.99 lakh crore | +10% YoY; average ₹198,722 crore vs closing ₹198,969 crore (market dips kept average close to closing); equity mix 46.5% |
| Passive QAAUM | ~₹40,000 crore | +14% YoY; 17.4 lakh folios; 52 offerings across equity, fixed income, and commodities |
| ETF QAAUM growth | +47% YoY | Significantly ahead of industry growth of ~29% |
| SIP AUM | ~₹87,000 crore | Quarterly SIP contribution ~₹3,300 crore, in line with Q4 FY26 |
| SIP Contribution (June 2026) | ₹1,085 crore | Supported by 40 lakh SIP folios; ~5.5 lakh new SIP registrations during the quarter |
| Total Revenue | ₹625 crore | +11% YoY vs ₹565 crore in Q1 FY26 |
| Profit Before Tax | ₹406 crore | +9% YoY vs ₹372 crore in Q1 FY26 |
| Profit After Tax | ₹309 crore | +12% YoY vs ₹277 crore in Q1 FY26 |
| Yield – Equity / Debt / Liquid / ETF | 63-64 / 24-25 / 12-13 / ~8 bps | Reflects new BER regime effective April 2026; yields expected to hold ±1-2 bps barring telescoping pricing |
| Total Investor Folios | 1.11 crore | Includes 40 lakh SIP folios |
| Total Employees | 1,638 | As of June 30, 2026; ESOP cost adds ~₹10 crore per quarter |
Geographic & Segment Commentary
- Mutual Fund – Active Equity & Hybrid: MF QAAUM at ₹4.28 lakh crore (+6% YoY), with equity QAAUM of ₹1.99 lakh crore (+10% YoY) and equity mix at 46.5%. Performance improvement across equity and hybrid portfolios is driving inflows into flagship schemes including FlexiCap, Balanced Advantage, MidCap, Multi-Cap, Small Cap, and Index funds, several of which are now on bank channel recommendation lists.
- Passive & ETF: Passive QAAUM ~₹40,000 crore (+14% YoY) with 17.4 lakh folios and 52 product offerings; ETF QAAUM grew ~47% YoY vs industry ~29%. Hemen Bhatia appointed as Head of Passives to drive product innovation, investment capability, and customer acquisition.
- Alternate (PMS & AIF): PMS/AIF assets grew from ₹28,650 crore in Q1 FY26 to nearly ₹2 lakh crore, largely driven by ESIC and EPFO mandates; contributes
7% of gross revenue (4% on net revenue post distributor payout). New launches include ABSL Select Sector Fund, Structured Opportunity Fund II, Money Manager Fund, and India Select Sector Fund. - Real Estate: AUM ~₹700 crore (+25% YoY); fundraising underway for Aditya Birla Real Estate Credit Opportunities Fund – Series II, focused on senior secured lending and post-approval brownfield projects across Tier-1 cities.
- SIF: Launched first SIF – Apex SIF Hybrid Long Short Fund; after establishing a six-month track record, now building size; preparing to launch two more SIFs (equity long-short and Equity Ex-Top 100 long-short) with two additional specialists onboarded.
- GIFT City / Offshore: Retail license received; fundraising underway for ABSL Flexi Cap feeder fund for NRI investors; upcoming retail products include an emerging market equity fund, India growth fund, and a series of global index funds.
Company-Specific & Strategic Commentary
- EPFO & ESIC Mandates: Landmark EPFO mandate of ~₹6.08 lakh crore helped total closing AUM cross ₹10 lakh crore. Revenue from mandates is marginal, but provides an edge in reaching out to 1,350 EPFOs to channel their equity contributions into ABSL active and passive funds.
- Distribution Network Expansion: CEO's "Yatra" across Indian cities focused on distributor and investor engagement; products added to approved/recommendation lists at HDFC Bank (FlexiCap added in last two weeks), Kotak, YES Bank, Standard Chartered, LGT Wealth, Ask Wealth, and IndusInd Bank.
- Technology & Digital Transformation: Gen AI-powered chatbot to engage investors early in the decision journey, new distributor and investor app for portfolio tracking and seamless transactions, and WhatsApp-enabled servicing platform launched.
- SIP Growth Initiatives: Focused campaigns for employees and partners launched to revive SIP book momentum; "Sabse Important Plan" campaign reinforces systematic investing with 40 lakh SIP folios.
- Capital Deployment in Alternatives: AMC provides seed capital up to 10% of fund size and temporary bridging capital for large deals, applied to AIF performing credit and real estate credit strategies.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Yield | Maintain current levels ±1-2 bps | BER fully rolled out; telescoping pricing based on AUM size is the only incremental factor; alternate business mix will help sustain yields |
| Operating Expenses | Within inflationary guidelines | Employee cost to remain at Q1 range (ESOP already factored); no cost shocks expected |
| PMS Long-Only AUM | ₹20,000-21,000 crore over 3 years | From current ~₹5,000 crore; already on leading wealth management approved lists |
| AIF Strategies | ₹5,000-7,000 crore each to start | AIF performing credit delivering ~14% returns; real estate credit has established track record; seed capital support in place |
| Alternate Revenue Contribution | ~4% of net revenue, stable range | All LOBs growing; fee/commission expense expected to grow in line with Alternate revenue |
Risks & Constraints
| Risk | Context |
|---|---|
| Monsoon / El Niño | IMD expects below-normal rainfall; potential food price pressure, though comfortable foodgrain stocks, healthy reservoirs, and supply management should soften impact vs past years |
| Geopolitical / West Asia Conflict | IMF projects global growth moderating to ~3% in 2026; inflation may rise keeping central banks cautious on easing; India's diversified imports and buffers have contained impact so far |
| FII Outflows | Sustained FII selling during the quarter pressured large caps; domestic institutional flows and improving macros supported the market close; volatility likely to persist |
| SIP Book Growth | ABSL SIP book saw a marginal reduction; industry-wide higher cancellation rates and ELSS outflows; management has made SIP revival a top focus area |
| Fixed Income Volatility | May 2026 interest rate panic triggered temporary outflows from duration-based categories, impacting quarterly average assets; monies returned by June-end/July |
| Yield / Fee Pressure | Telescoping pricing as AUM scales and intensifying passive competition could compress yields; management expects only ±1-2 bps impact aided by Alternate mix |
Q&A Highlights
Yield & BER Regime
- Question: With ESIC/EPFO mandates excluded, is the increase in active yields the outcome of the TER regulation? What are segment-wise yields? (Swarnabha Mukherjee, 360 ONE Capital)
- Answer: BER effective from April 1, 2026 has been fully rolled out; commission structure optimized to be win-win for the AMC and distributors. Segment yields reflect the true picture: equity 63-64 bps, debt 24-25 bps, liquid 12-13 bps, ETF ~8 bps. (Pradeep Sharma)
Passive vs Active Industry Outlook
- Question: How will the industry develop between active and passive over the next 3-5 years? (Swarnabha Mukherjee)
- Answer: Active will remain the dominant asset class; passive helps build scale with extremely low-cost products, adding absolute profit though at lower margins. Industry retail passive ex-mandates is roughly ₹2.5-3 lakh crore, with gold/silver remaining profitable. (A. Balasubramanian)
Commission Restructuring
- Question: Out of 5 bps, how much was transferred to distributors? (Mohit Mangal, Centrum Capital)
- Answer: The entire commission ecosystem was reviewed and optimized to remain broadly neutral — yields intact and distributor margins maintained; neither side took a significant benefit or hit. (Pradeep Sharma; A. Balasubramanian)
SIP Market Share Pressure
- Question: Where is the SIP problem given flagship schemes are doing well? (Mohit Mangal)
- Answer: ELSS schemes are seeing industry-wide outflows and cancellation rates are higher than the prior quarter; May fixed income volatility pulled duration-based money out, impacting average assets — money returned by June-end/July. Core 7-8 flagship schemes are seeing improved SIP registrations and flows. (A. Balasubramanian)
PMS/AIF Revenue Split & SIP AUM
- Question: Can you spell out non-mutual fund revenue and SIP AUM for the quarter? (Mohit Mangal)
- Answer: SIP AUM is ~₹87,000 crore; PMS/AIF contribution is ~7% of gross revenue and ~4% of net revenue after distributor payouts. (Pradeep Sharma)
Flagship Fund Flows & Channel Expansion
- Question: How is market share tracking in flagship schemes and what are channel-wise trends? (Lalit Mohan Deo, Equirus Securities)
- Answer: Flows improving in FlexiCap, Balanced Advantage, Multicap, Small Cap, MidCap, Multi-Asset Allocation, and PSU Equity funds; MFD volumes gradually picking up; HDFC Bank added FlexiCap in the last two weeks, Kotak onboarded schemes; approvals secured from YES Bank, Standard Chartered, LGT Wealth, Ask Wealth, and IndusInd Bank. (A. Balasubramanian)
Equity AUM Clarification, ESIC Revenue & Top Flow Funds
- Question: Why is closing equity AUM in line with quarterly average despite market returns? What is ESIC's annualized revenue? Which funds will see maximum flows? (Abhijit Sakhare, Kotak Securities)
- Answer: Market dips during April-June kept the average (₹198,722 crore) close to closing (₹198,969 crore). ESIC/EPFO revenue is very marginal but opens the gate to 1,350 EPFOs' private equity contributions. Top funds for flows: FlexiCap, Balanced Advantage, Multi-Asset Allocation, and Small Cap. (A. Balasubramanian; Pradeep Sharma)
OPEX Outlook
- Question: Any OPEX growth outlook for the year? (Abhijit Sakhare)
- Answer: OPEX to remain within inflationary guidelines; employee cost already reflects the ESOP rollout and should remain in a similar range; no cost shocks expected. (Pradeep Sharma)
Alternate Business Growth Ambition
- Question: Ex-mandate non-MF AUM has been stable over 2-3 years — how should we think about growth? Is the fee/commission expense increase attributed to non-MF business? (Dipanjan Ghosh, Citibank)
- Answer: PMS long-only is at ~₹5,000 crore with a 3-year target of ₹20,000-21,000 crore; AIF performing credit is delivering ~14% returns; each AIF strategy targeting ₹5,000-7,000 crore; AMC provides seed capital up to 10% of fund size and bridging capital for large deals. Fee/commission expense is directly linked to Alternate business commissions and should grow in line with Alternate revenue. (A. Balasubramanian; Pradeep Sharma)
Flow Trajectory
- Question: How are flows tracking on an indexed run-rate basis? (Dipanjan Ghosh)
- Answer: April was strong; May and June were muted alongside equity markets. The 3-month run-rate is better than the FY26 full-year run-rate, and the trend is improving for key funds as products enter recommendation lists and longer-term performance strengthens. (A. Balasubramanian)
Key Takeaway
ABSL AMC delivered steady Q1 FY27 results with revenue up 11% YoY to ₹625 crore and PAT up 12% YoY to ₹309 crore; MF QAAUM grew a modest 6% YoY to ₹4.28 lakh crore. The ₹6.08 lakh crore EPFO mandate propelled closing AUM past ₹10 lakh crore and overall QAAUM (incl. Alternates) to ₹6.28 lakh crore (+42% YoY). The new BER regime (April 2026) was fully absorbed with yields at equity 63-64 bps and debt 24-25 bps; management guided to stable yields (±1-2 bps) barring telescoping pricing. Strategic priorities include reviving the marginally declining SIP book (June SIP ₹1,085 crore), scaling passive (₹40,000 crore QAAUM, +14% YoY), SIF and GIFT City franchises, and growing PMS/AIF ex-mandate AUM toward ₹20,000-21,000 crore over three years. Watch points: El Niño monsoon risk, FII outflows, fixed income volatility, and telescoping pricing pressure on yields.