The volatile equity markets and increasing geopolitical uncertainty have significantly impacted asset management companies (AMCs), leading to declines in both revenue and profitability on a sequential basis for the March quarter. Nonetheless, many leading AMCs demonstrated stronger year-on-year performance due to consistent investor inflows.
Analysts predict that a reduction in the total expense ratio (TER) will affect profit margins by 3-4 basis points, even as fund houses negotiate with intermediaries to mitigate rising costs. The overall net profit for all listed fund houses declined quarter-on-quarter. Notably, UTI AMC reported a loss of ₹67 crore in the March quarter, down from a profit of ₹121 crore in the December quarter. Conversely, Nippon AMC experienced the smallest decrease, with profits dipping just five percent to ₹384 crore from ₹404 crore in the previous quarter. The depreciation of the rupee also adversely affected overseas operations, alongside a sharp downturn in equity markets impacting earnings from passive funds.
In terms of year-on-year comparisons, all fund houses except Nippon Mutual Fund and ICICI Mutual Fund registered declines in net profit for the March quarter. Canara Robeco and HDFC AMC had the least significant reductions in net profit, at 0.2 percent and 2.4 percent, totaling ₹41 crore and ₹623 crore, respectively.
Shweta Rajani, Head of Mutual Funds at Anand Rathi Wealth, stated that despite challenging market conditions in the March quarter, leading AMCs have reported robust results for FY’26, with revenue growth outpacing costs. Rajani also mentioned that while the TER cut may not have an immediate substantial impact, the mutual fund industry is undergoing rapid growth, with monthly systematic investment plan (SIP) inflows exceeding ₹30,000 crore and an increasing number of investors from smaller cities entering the market.
However, the reduction in TER could pose a greater challenge for smaller AMCs lacking scale advantages or negotiating power. In contrast, larger AMCs may experience margin pressure rather than a direct threat to overall profitability.
Revenue figures for Nippon MF and Canara Robeco MF showed increases of 5 percent and 4 percent quarter-on-quarter, reaching ₹739 crore and ₹114 crore, compared to ₹705 crore and ₹110 crore in the previous quarter. ICICI AMC’s revenue remained stable at ₹1,517 crore. Other fund houses, including Aditya Birla Sun Life AMC and HDFC AMC, reported flat revenue growth, while UTI AMC saw a 25 percent revenue decline due to a net gain on fair value changes of ₹107 crore in the December quarter.
Year-on-year, all fund houses reported revenue growth between 7 and 30 percent. Rajesh Singla, CEO and Fund Manager at Alpha AMC, highlighted that structural SIP inflows surpassing ₹65 lakh crore in FY26 will provide AMCs with a stable revenue base that does not solely depend on market performance for growth. He emphasized that imminent equity market movements will be crucial for AMCs, as their revenues are closely tied to assets under management (AUM), which in turn are influenced by equity market levels and ongoing SIP commitments.
Published on May 1, 2026.
