HDFC Asset Management

Company Limited
Q3 FY18-19

1
 Strong Macro Fundamentals and Industry Growth
Enablers

High Savings Culture… ..Shift to Financial Assets..

Growing Household Savings (Rs trn) (1) % of Gross Household Savings(1)
100%
30 0.5 0.5 0.5
0.4 0.4
25 0.3 80% 46%
55% 55% 51%
12.7 60% 59%
20 15.1 14.0
14.2 60%
14.7
15 13.9
40%
10 18.8
15.2 54% 49%
12.6 14.0 20% 40% 41% 45% 45%
5 10.6 11.9
9.3
0 0%
(2.9) (3.3) (3.6) (3.8) (3.9) (3.7) (6.7) FY12 FY13 FY14 FY15 FY16 FY17
(5)
FY12 FY13 FY14 FY15 FY16 FY17 FY 18
Gross Financial Savings Savings in Physical Assets Gold and Silver Financial Liabilities Gross financial savings Savings in physical assets (inc Gold/Silver)

…With Increasing Preference for Mutual Funds

Financial Savings and Equity Inflows into Mutual Funds (2) Mutual Fund AUM Reducing the Gap with Bank deposits(4)
Financial Savings
Equity-oriented MF
Rs. bn Total Deposits’ Total Financial
Currency Share (%) Net Sales
Share (%) Savings(3) (Rs. trn) 20.6%
13.4%
150.0
FY12 11% 58% 9,282 5 10.4%
104.0
FY13 11% 57% 10,609 (144) 91.9
100.0
67.2
FY14 8% 56% 11,859 (113)
50.0
FY15 11% 49% 12,531 809 12.3 21.4
7.0
FY16 13% 42% 15,167 938 0.0
FY13 FY16 FY18
FY17 (23%) 69% 14,005 1,070 Mutual Fund AUM Bank Deposits
FY18 25% 26% 18,767 2,608

2
____________________
(1) Source: MOSPI, CRISIL Research; (2) Source: RBI, CSO, CRISIL Research; (3) Excluding Trade debt (Net); (4) Source: AMFI, RBI, CRISIL Research; Note: Bank deposits includes nationalised banks, private sector banks and foreign banks
 Strong Macro Fundamentals and Industry Growth
Enablers
Mutual Fund AUM as a % of GDP(1) Mutual Fund - Equity AUM as a % Market Cap.(2)
80%
160%
149% 72%
70%
140%

60%
120%
108%

50% 48%
100%
45%
85%
40%
80%
68% 67% World Average 33%
31%
59% World Average 59% 30% 28% 28%
60% 27%
49%

37% 20% 19%

40%
29%
13%
20%
20% 15% 13% 10% 7%
11% 10% 6% 5% 4% 4%

0% 0%

India
Japan

Italy

Mexico
Australia

USA

S. Africa

Korea
Germany

France
UK

Brazil

China

Chile
USA

France
Australia

Brazil

S.Africa

Chile

Mexico
Korea

China

India
UK

Germany

Japan

Italy

Structural Shift in Savings Habit Supporting the Future Growth Runway for the Mutual Fund Industry
____________________
(1) Source: IMF (GDP, CY 2018), IIFA (MF AUM, CY 2018:Q1); only open-ended funds have been considered. 3
(2) Source: Bloomberg (Market-Cap CY 2018:Q1), IIFA (MF AUM, CY 2018:Q1); only open-ended funds have been considered; balanced/mixed funds are assumed to be composed of 70% equity and 30% debt.
 Industry - AUM and Net Sales

27% 25% 34% 35% 36% 44% 43% 44% 45%

22.9 1.1
21.4 22.0
21.3 0.8 1.0
Mar-14 to Dec-18 CAGR: 0.8
Overall: 23%; Equity: 34%; Debt: 10%; Liquid: 32% 17.5 2.9 3.4 3.9 4.5
0.5
3.1
12.3 8.3 8.0 7.3 7.0
10.8 0.2
AUM (₹ trn)

0.2 2.0
8.3 1.6 7.6
7.0 0.2
0.2 1.3 5.8
0.9 5.3
4.7 9.4 9.2 9.8 10.2
4.0
6.3
3.7 4.3
1.9 2.1
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Dec-17 Mar-18 Sep-18 Dec-18

Equity Debt Liquid Others Equity as a % of Total FYTD19 Arbitrage net flows: ₹ 16.68 bn

Dec-18 Arbitrage AUM: ₹ 0.57 trn

Yearly net sales Quarterly net sales
2,608

757
1,173
Net Sales (₹ bn)

938 1,070 958 1,026 933 425

870 809 314 308
395 171 154
241 12898 229 227 268 122
32 7 17 159 74 2

(144) (113) (1) (88)(29) (112)

(486) (478)
(1,359)
(744) (711)
FY13 FY14 FY15 FY16 FY17 FY18 FYTD19
____________________ Q3FY18 Q2FY19 Q3FY19 4
Source: AMFI
AUM excluding FOF – domestic; equity includes balanced funds; others include Liquid / Money Market, Gold ETFs, other ETFs and FOF – investing overseas
 Individual / Institutional MAAUM, SIP Flows, B-15/B30

MAAUM of Individual Investors(1)(2)(3) SIP Flows(1) MAAUM of B-15/B-30(1)(2)

54.8 77.5 79.8 10.1 11.3 13.5 18.8 21.1 24.4 25.4 16% 16% 16% 17% 19% 15% 15%
39.2 41.4 47.2 66.1 70.9

B15 B30

MAAUM in ₹ bn
(SIP contribution in ₹ bn)
80
77
(MAAUM ₹ trn)

20,743 20,457
71
18,442
62

11.3 15,487
11.2
(47%) (46%)
11.2 11.0
(49%) (49%) 43
11,365
10.1 37 10,185
(54%)
31
7.4 7,572
6.5 (55%)
(54%)
5.0 13.0 12.9
11.4 11.7 4,265
(54%) (53%) (54%) 3,628
3,091 3,570
8.5 (51%) (51%)
(46%) 1,892 2,187
3.9 5.6 6.2 1,392
(45%)
(46%) (46%)

Mar-14 Mar-15 Mar-16 Mar-17 Dec-17 Mar-18 Sep-18 Dec-18 Apr-16 Sep-16 Mar-17 Dec-17 Mar-18 Sep-18 Dec-18 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 Dec-18
T-30 B-30
Individual Investors Institutional Investors No. of SIP Accounts (mm)
T-15 B-15 Share of B-15 MAAUM
Individual Folios (mm)

____________________ 5
(1) Source: AMFI, (2) Based on monthly average AUM of the last month of the period; (3) Percentages in brackets denote % share of total
 HDFC AMC at a glance

48% Equity-Oriented
Assets
Assets Under
Management(1)
52% Non-Equity Oriented
Assets

₹ 1,580 bn ₹ 1,710 bn
₹ 3,291 bn
US$ 22.7 bn US$ 24.5 bn
US$ 47.2 bn

8.9 mm ₹ 91.6 bn
Live Accounts(1) PMS & SMA AUM(1) (3)

210 Branches(1)(2);
75k+ Empaneled 1,167 Employees(1)
Distribution Partners ₹ 2,033 bn
Individual MAAUM(1)

____________________ 6
(1) As of Dec 31, 2018 / for Dec 2018; (2) Includes one representative office in Dubai; (3) Includes advisory mandates; (4) USD/INR conversion rate: ₹69.7675
Source: Internal
 Total AUM and Market Share

Total AUM(1) Market Share in Total AUM(2)

₹ billion
HDFC MF, *
YoY 12% Dec-2018 14.4%

3,291
2,933 2,920 2,926

2,306 Sep-2018 HDFC MF, Dec-2017

HDFC MF,
13.3%
13.8%
1,656
1,506
1,089
938

Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Dec-17 Mar-18 Sep-18 Dec-18

____________________
(1) Source: Internal *Due to sharp increase in AUM of liquid funds
7
(2) Source: Internal, AMFI
 Actively Managed Equity-oriented AUM and
Market Share

#1 Market Share in Actively Managed Equity-oriented

Actively Managed Equity-oriented AUM(1) AUM(2)
₹ billion HDFC MF
YoY 3 %
Dec-2018 16.0%

1,496 1,476 1,535

1,449

957 Sep-2018 Dec-2017

HDFC MF HDFC MF
675 629 16.0% 17.1%

390 406

Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Dec-17 Mar-18 Sep-18 Dec-18

____________________
(1) Source: Internal
(2) Source: AMFI, Internal
8
Actively managed equity-oriented AUM excludes index and arbitrage funds from equity-oriented funds
 AUM by Segment – HDFC AMC and Industry

HDFC AMC MF AUM by Segment (1) Industry AUM by Segment(2)

Dec-2018 Others
Dec-2018
0.3% Others
Liquid 5.0%
23.9% Liquid
19.5%

Equity Equity
48.0% 44.8%

Debt Debt
27.8% 30.7%

Sep-2018 Dec-2017
Sep-2018 Dec-2017
Others Others Others Others
0.2% 0.3% 4.4% 3.6%
Liquid Liquid
10.8% Liquid
15.6%
Liquid 13.5%
17.9%
Equity Equity
Equity 44.4% 44.1%
Equity
51.9% Debt 53.0%
Debt 36.0%
32.3%
Debt
Debt 38.8%
33.3%
____________________
(1) Source: Internal
(2) Source: AMFI
9
 Individual Investors – no of Accounts & MAAUM

Number of Live Individual Accounts (in millions) (1) Individual MAAUM % of Total(1)
YoY 10%
YoY 17%
624 931 945 1,350 1,850 1,863 1,985 2,033

8.86 Mar-14 to Dec-18 CAGR: 28%

8.62 64.5%
62.2% 62.2% 61.8%
8.05
7.56 56.3% 56.0%
54.6% 53.6%
52.8%

6.15
5.55
5.14
4.44

Mar-14 Mar-15 Mar-16 Mar-17 Dec-17 Mar-18 Sep-18 Dec-18 Mar-14 Mar-15 Mar-16 Mar-17 Dec-17 Mar-18 Sep-18 Dec-18 Industry (2)
Individual MAAUM (Rs bn)(1) (Dec-18)

Individual customer prefer equity-oriented schemes and stay invested for longer periods
____________________
(1) Source: Internal 10
(2) Source: AMFI
 Most Preferred Choice of Individual Investors

Individual Assets Market Share (Dec-18) Individual Assets Market Share (Sep-18) Individual Assets Market Share (Dec-17)

15.4% 15.1% 16.0%

13.9% 14.0% 14.7%

9.5% 9.4% 9.3% 9.8% 9.4% 9.1% 9.9% 9.8%

8.3%

HDFC ICICI Pru ABSL SBI Reliance HDFC ICICI Pru ABSL Reliance SBI HDFC ICICI Pru ABSL Reliance SBI
MF MF MF MF MF MF MF MF MF MF MF MF MF MF MF

11
Source: AMFI , based on monthly average AUM
 Unique Investors

Unique Investors- HDFC AMC vs MF Industry

25.0 28% 28% 27%

(Unique Investors in million)

20.0 19.1
18.4

15.7
15.0

10.0

5.1 5.2
5.0 4.3

0.0

Dec’17 Sep'18 Dec'18

HDFC Mutual Fund Mutual Fund Industry

HDFC MF share in Mutual Fund Industry

Source: CAMS. Note: Unique Investors include PANs/PEKRNs of all unit holders & Guardians 12
 Systematic Transactions

Quality Long-term Inflows Through Systematic Transactions

Strong Growth in Systematic Transactions (₹ mm) Long Tenure SIP Book(1)

3.36
77.1%

11,531 11,470 11,689

64.2%
10,698

6,768

5,494
4,999 Over 5 Years Over 10 Years
4,745 4,854
1.23 4,319

3,082
Strong and growing
“Order Book” to provide
predictable flows

Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Dec-17 Mar-18 Sep-18 Dec-18

#mm systematic transactions

____________________
Source: Internal
(1) Based on tenure at the time of registration of all live SIPs during Dec-18
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 Multi-channel Distribution Network

Well Diversified Distribution Channel

Total AUM (Dec-18) Equity-oriented AUM (Dec-18)

HDFC Bank 7.8%

HDFC Bank 10.9%
Banks, 13.9% Direct
17.7% Banks, 17.2%
Direct
39.7%

IFAs
28.5% National Distributors
22.0% IFAs
National Distributors 43.1%
18.0%

Sep-2018 HDFC Bank 11.3%

Dec-2017 HDFC Bank 12.9%
Sep-2018 HDFC Bank 9.1% Dec-2017 HDFC Bank 9.3% Direct, Direct,
17.4% 15.2%
Direct Banks, 17% Banks, 17.8%
Banks, 15.8% Direct, Banks, 20.3%
34.5% 32.2%

IFAs, 28.4%
IFAs National
29.0% National Distributors, Distributors,
National Distributors 24.1% 24.6% IFAs, 39.9%
National Distributors, IFAs, 40.7%
20.8%
22.5%

14
Source: Internal
 Geographic Spread

Total MAAUM by T30 and B30 cities(1) #2 Player in B-30 Markets(1)

B 30, SBI MF,

14.3% 17.8%
Others,
36.4% HDFC
MF,
11.9%

Reliance
ICICI Pru MF, 11.8%
MF, 10.9% UTI MF,
T 30,
11.2%
85.7%

Network of 210 branches with 134 in B-30 cities(2)

c. 75k+ empaneled distribution partners

____________________
(1) Source: Internal 15
(2) As of Dec 31, 2018. Includes one representative office in Dubai;
 Strong Digital Presence

Supported by Integrated Online Platform

Electronic and Physical Transaction as % of Total Transactions

28.8%
49.2% 51.8%
69.9%
Digitization Across
Functions
71.2%
50.8% 48.2%
30.1%

FY15 FY18 Q3FY18 Q3FY19

Electronic Physical

Strong online presence - dedicated separate digital platforms distribution partners and customers
FY15-18 CAGR of 46.2% for electronic transactions
17.4% transaction are through HDFC MFOnline and mobile application
16
Source: Internal
Recent Developments

o Amendments in TER as per SEBI notification dated 13th December 2018, effective from
1st April 2019.

o Effective 22nd October 2018, regulator has made following key changes

• All scheme related expenses, including distributor commissions, to be paid from

scheme accounts only and not from the AMC accounts.
• Ban on upfront commission.

17
Financials

18
 Ind AS Transition

▪ Adoption of Indian Accounting Standards (Ind AS) with effect from 1st April 2018.
▪ Results of Q3 FY19 & 9M FY19 are prepared as per Ind AS requirements.
▪ Accordingly figures for Q3 FY18 & 9M FY18 have been restated.

Key Changes Remarks

Investments Investments are fair valued through P/L except certain
debt instruments which are valued at amortised cost.
Employee Stock Option Obligations under outstanding & unvested ESOS have to be fair valued
Schemes (ESOS) and amortised as part of employee benefit expenses over the period of
vesting.
Others Interest free refundable security deposits are required to be measured
at present value using an appropriate discount rate.
Deferred Tax adjustments on GAAP differences (where required).
19
 PAT Reconciliation-
Previous GAAP Vs Ind AS – Q3 FY 18
(Rs. mm)
Particulars Q3 FY 18
Net profit after tax as reported under Previous GAAP 1,846

Adjustment increasing / (decreasing) net profit after tax as reported

under Previous GAAP (net of tax):
Fair value change in investments 139
Fair valuation of employee stock options (33)
Others 2
Actuarial (gain) / loss on employee defined benefit plan recognised
in 'Other Comprehensive Income' (3)

Net Profit after tax as per Ind AS 1,951

Other Comprehensive Income 2

Total Comprehensive Income (net of tax) as per Ind AS 1,953

20
Financials Summary – Nine months ended Earnings

(Rs. mm)

Particulars 9M FY19 9M FY18 Change

Revenue from Operations 14,287 12,881 11%
Other Income 1,206 817 48%

Total Revenue 15,493 13,698 13%

Expenses
Employee Benefit Expense 1,587 1,422 12%
Depreciation and Amortization Expense 94 70 34%
Business Development and Other Expenses 4,211 4,394 -4%
Total Expenses 5,892 5,886 0%

Profit before tax 9,601 7,812 23%

Tax Expenses 3,057 2,417 26%
Profit after tax 6,544 5,395 21%
Other Comprehensive Income (Net of Tax) (7) (5) 44%
Total Comprehensive Income 6,537 5,390 21%

Particulars 9M FY19 9M FY18 Change

Revenue from Operations 14,287 12,881 11%
Total Expenses* 5,590 5,886 -5%
Operating Profit from core AM business* 8,697 6,995 24%
*Adjusted for non recurring expenses 21
Financials Summary – Quarterly Earnings

(Rs. mm)
Particulars Q3 FY19 Q3 FY18 Change
Revenue from Operations 4,771 4,676 2%
Other Income 559 276 103%

Total Revenue 5,330 4,952 8%

Expenses
Employee Benefit Expense 505 503 0%
Depreciation and Amortization Expense 37 25 49%
Business Development and Other Expenses 1,105 1,573 -30%
Total Expenses 1,647 2,101 -22%

Profit before tax 3,683 2,851 29%

Tax Expenses 1,250 900 39%
Profit after tax 2,433 1,951 25%
Other Comprehensive Income (Net of Tax) (9) 2 -453%
Total Comprehensive Income 2,424 1,953 24%

Particulars Q3 FY19 Q3 FY18 Change

Revenue from Operations 4,771 4,676 2%
Total Expenses* 1,557 2,101 -26%
Operating Profit from core AM business* 3,214 2,575 25%
*Adjusted for non recurring expenses
22
 Operating Profit Margin

Operating Revenue Operating Expenses PBT&OI (bps of AAUM)

63 63 65 64
60
53
29 25 29 33
44
34

34 35* 34 31
21 19

9M FY18 9M FY19 HDFC AMC Reliance AMC ICICI Pru AMC ABSL
AMC

FY18 as per previous GAAP

9M FY18 as per Ind AS
9M FY19 as per Ind AS FY18
*Adjusted for non recurring expenses: 36
____________________ 23
Based on internal computations
 Profitable…

FY17 Profit after tax (Rs bn) FY18 Profit after tax (Rs bn)

5.50 7.22
4.81 6.26
4.05
5.05

3.31 3.22
2.24 2.21

FY17 ICICI Pru Reliance SBI ABSL FY18 ICICI Pru Reliance SBI ABSL
AMC AMC AMC AMC AMC AMC AMC AMC

Most profitable asset management company in India in terms of net profits since FY14
____________________
Source: Annual reports, AMFI, CRISIL Research 24
Note- The above is as per previous GAAP.
 Financials Summary – Historical Trends
Figures In Rs mm
Revenue from Operations Operating Profit

17,598 9,550
14,800
12,260 6,919
9,527 5,459 5,487

FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18

Profit before tax Profit after tax

10,625 7,216
7,998 5,502
5,877 6,005 3,925 4,074

FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18

25
Note-The above is (Excluding REP Performance Fee). The preparation is as per previous GAAP.
 ROE and Dividend Payout Ratio

40% + Return on Equity(1)

FY15 FY16 FY17 FY18

41.1% 42.1% 42.8% 40.3%

40%
40% + return on average net worth every year since FY15

Consistently improving Dividend Payout Ratio(2)

____________________
(1) Calculated as Profit After Tax divided by average Net Worth
26
(2) Including dividend distribution tax
Thank You

27
Disclaimer

This presentation is for information purposes only and does not constitute an offer or invitation to sell or the recommendation or solicitation of an offer or
invitation to purchase any securities (“Securities”) of HDFC Asset Management Company Limited (the “Company”) in India, the United States, Canada, the
People’s Republic of China, Japan or any other jurisdiction. This document has not been and will not be reviewed or approved by a regulatory authority in India or
by any stock exchange in India.
The Company has prepared this presentation based on information available to it, including information derived from public sources that have not been
independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or
reliability of the information, opinions or conclusions expressed herein. The Company may alter, modify or otherwise change in any manner the contents of this
presentation, without obligation to notify any person of such revision or changes. Past performance may or may not be sustained in future and should not be
considered as, indicative of future results. The presentation may contain information about HDFC Mutual which has to be read and understood in the context of
the Company’s business, its operations and performance, and should not be construed as any form of communication/advertisement of HDFC Mutual Fund. The
information contained in this presentation is strictly confidential and is intended solely for your reference and shall not be reproduced (in whole or in part),
retransmitted, summarized or distributed to any other persons without Company’s prior written consent
This presentation may contain, words or phrases like will”, “aim” “believe”, “expect”, “will continue”, “anticipate”, “estimate” and similar expressions or
variations of these expressions, that are “forward-looking statements that involve risks and uncertainties and are based on certain beliefs, plans and expectations
of the Company. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a
number of risks, uncertainties and assumptions. Although the Company believes that such forward-looking statements are based on reasonable assumptions, it
can give no assurance that such expectations will be met. Representative examples of factors that could affect the accuracy of forward-looking statements include
(without limitation) the condition of, and changes in, India’s political and economic status, government policies, applicable laws, global capital markets, the
mutual fund industry in India, and international and domestic events having a bearing on the Company’s business, and such other factors beyond the Company’s
control. You are cautioned not to place undue reliance on these forward-looking statements, which are based on current views of the Company’s management on
future events. Further, nothing in this presentation should be construed as constituting legal, business, tax or financial advice or a recommendation regarding the
securities. None of the Company or any of its affiliates, advisers or representatives accepts any liability whatsoever for any loss howsoever arising from any
information presented or contained in this presentation. Before acting on any information you should consider the appropriateness of the information having
regard to these matters, and in particular, you should seek independent financial advice.

Definitions
AUM refers to Assets Under Management as on end of any given month/period
MAAUM refers to a given month’s average Assets Under Management
QAAUM refers to a given quarter’s average Assets Under Management
AAAUM refers to a given year’s average Assets Under Management
Unless otherwise stated, the above definitions are used for Mutual Fund Assets under management

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