HDFC AMC profit rises 12% despite 27% surge in expenses
India's largest actively managed equity fund manager posted a 12% rise in first-quarter profit, though a sharper increase in operating expenses signals potential margin pressures despite robust asset growth.
HDFC Asset Management Company reported a net profit of Rs 837 crore for the quarter ended June 30, 2026, representing a 12% year-on-year increase. Revenue from operations grew 14% to reach Rs 1,099.72 crore, up from Rs 968.15 crore in the same period last year. Total income for the quarter rose just over 13% to Rs 1,363 crore.
The earnings growth, however, was somewhat overshadowed by a notable acceleration in operating costs. Total expenses surged 27% year-on-year to Rs 273.54 crore, growing at nearly double the pace of revenue. For market participants, this cost trajectory will be a critical focal point moving forward, as sustained expense inflation could eventually compress the firm's historically high profit margins.
Underlying the revenue growth was a solid expansion in the company's asset base. Assets under management stood at Rs 9.32 lakh crore, while quarterly average assets under management (QAAUM) increased nearly 13% to Rs 9.35 lakh crore. Across the broader Indian mutual fund industry, HDFC AMC held an 11.2% share of total QAAUM.
The firm's portfolio composition continues to lean heavily toward equities relative to the wider market. Its equity-to-non-equity QAAUM ratio came in at 66:34, compared to an industry average of 57:43. This equity bias is a key driver of the company's fee income. Actively managed equity funds accounted for Rs 5.74 lakh crore in QAAUM, giving the company a 12.8% market share and reinforcing its status as India's largest actively managed equity fund manager.
On the distribution side, HDFC AMC reported 31.1 million live accounts at the end of the quarter. The firm identified 17.1 million unique customers by PAN, capturing a 28% penetration rate of the industry's total 61.9 million investor base. Shares of the asset manager, which has a market capitalisation of nearly Rs 1.17 lakh crore, have gained 129% over three years but have largely flattened with a 3% return over the past 12 months.
