HDFC Asset Management Company Limited (HDFCAMC.BO) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q2 FY '26 Earnings Conference Call of HDFC Asset Management Company Limited. [Operator Instructions] Please note that this conference is being recorded. From the management team, we have with us Mr. Navneet Munot, Mr. Naozad Sirwalla and Mr. Simal Kanuga. I now hand this call over to Mr. Simal Kanuga, who will give us a brief following which, we will proceed with the Q&A session. Thank you, and over to you, Simal.

Thank you very much. Good evening, everyone, and thank you very much for joining us today. We trust you had an opportunity to review our presentation. We'll start with industry. NIFTY 50 declined by 2.9% in July, 1.4% in August and was up by 0.8% in September. Industry witnessed net new flows of INR 593 billion, INR 458 billion and INR 439 billion, respectively, in equity-oriented funds. The net new flows for the quarter adds up to INR 1,490 billion as against INR 911 billion in the previous quarter when NIFTY 50 delivered 8.5% positive returns. Over the last 12 months ending September 2025, equity-oriented funds have recorded net inflows of INR 5.1 trillion. NIFTY 50 has delivered negative returns in last 1 year. The SIP contribution continues to grow, reaching INR 294 billion for the month of September 2025. What is particularly noteworthy is the net addition of 6 million contributing SIP accounts in the quarter. In our view, this reflects the growing maturity and long-term orientation of Indian investors. On the fixed income side, debt mutual funds experienced some moderation with quarterly inflows easing to INR 148 billion, down from INR 1,339 billion in quarter ended June 2025. Liquid funds, in particular, witnessed outflows of INR 219 billion as compared to net inflows of INR 609 billion seen in the previous quarter. There is indeed a noticeable increase in demand for gold and silver ETFs recently, with inflows amounting to INR 208 billion in this quarter. This surge in investor interest has been reflected in AUM growth for our gold and silver ETF as well. Our gold ETF AUM has increased significantly from INR 102 billion to INR 141 billion, while the silver ETF AUM has more than doubled from INR 9 billion to INR 24 billion in this quarter. During the quarter, equity-oriented NFOs collected INR 141 billion. Now we move to us. We closed the quarter with AUM of INR 8.7 trillion, reflecting a market share of 11.5% and 12.8% on ex ETF basis, actively managed equity-oriented AUM on closing basis, inched up to INR 5.4 trillion, a market share of 12.9%. Within fixed income, debt and liquid fund market share stood at 13.3% and 11.8%, respectively. Total AUM has crossed INR 9 trillion mark since then. The asset mix furthered towards equity with equity proportion rising to 64.9% on QAAUM basis. Systematic transaction activity remained robust with monthly flows in September 2025 reaching INR 45.1 billion across over 13 million transactions. Corresponding number for systematic flows in September 2024 was INR 36.8 billion. We maintained our position as the preferred choice amongst individual investors with market share of 13.1%. During the quarter, we launched 2 NFOs, HDFC Innovation Fund, which collected INR 24 billion, and HDFC Diversified Equity All Cap Active FOF, which collected INR 11 billion. Move to financials now. Revenue from operations came in at INR 10,260 million, a growth of 16% Y-o-Y. The reduction in other income was mainly on account of adverse mark-to-market changes. Total expenses were INR 2,464 million, and this includes noncash charge towards ESOPs and PSUs adding up to INR 211 million. Operating profit grew by 13% Y-o-Y to INR 7,796 million, that is 35 basis points of AUM. Profit after tax is now at INR 7,179 million. We would like to highlight that the company has reassessed its income tax provision and reverse income tax provision for earlier periods amounting to INR 468 million, resulting in a lower tax rate for the current quarter. PAT without this particular reversal would have been INR 6,711 million. Lastly, the Board of Directors earlier today approved 1:1 bonus share issue. This is, of course, subject to shareholder approval. Thank you very much for patient hearing. Navneet, Naozad and I are here to take questions. Neerav, if you can just start lining up questions, please.

[Operator Instructions] The first question is from the line of Sucrit Patil from Eyesight Fintrade.

I have a question for Mr. Navneet. So I just want to understand a forward-looking question. As the industry is changing, how do you plan to stay ahead of the game. Will it be through new products or any tech upgrade or deeper client engagement? What is the long-term vision for where the company is going to be heading?

Thank you. So over the last 25 years, we have built a significant franchise. You mentioned about the product. I think we have an absolutely best-in-class product bouquet. We have a very long-term performance track record funds, going back 5, 10, 15, 20, 25, 30 years of track record. We have the presence across 280 branches, physical offices and as well as absolutely best-in-class digital assets. We have partnerships with hundreds of thousands of distributors, banks, national distributors, MFDs and of course, our presence on fintech and serving direct customers. We have like 14 million customers that we have been serving. We see tremendous potential for growth in our industry. I think with all of this what we have put in place over the next several years along with the pedigree of HDFC brand, we see tremendous growth. We continue to invest in everything that I have mentioned so far, having the best people across our investment, best product and all other functions. Continue to expand our presence. Over the last 2 years, we have opened 15 new offices -- 50 new office, a large number of them are in what we call in our industry B30 towns. In the smaller towns, where penetration is still low and given our pedigree, brand and everything else, we see a lot of potential to grow there. We continue to invest in our digital assets, in our technology to create the best possible experience for our investors and distribution partners. And we see a lot of growth apart from the mutual funds where we have been one of the dominant players. We have been investing to grow in the alternative space, in the PMS space, and of course, offering all of this to global institutions who would like to invest in India.

So just to close on that, just to make all this happen, I just want to understand what are the top 2 or 3 things, which you are focusing right now which is already in motion?

Maybe I think I'd answered what are the things that we have been doing. But maybe another way to put it is that, it may sound very audacious, but we have put a mission for ourselves, that is to be the wealth creator for every Indian, to be the wealth creator for every Indian. We serve 14 million investors, but we think we have a long way to go if we have an audacious mission like that. And our vision may sound even more audacious, which is to be the most respected asset manager in the world, to be the most respected asset manager in the world. And for that, I think our entire team won't leave any stone unturned to ensure that we create value for each and every stakeholder, be it our people, be it our shareholders, be it our clients, be it our distribution partners, be all our vendors, ecosystem partners and society at large. So maybe some of the things are getting covered in the presentation and the other things that we put it on our website, but I think we get governed and get inspired by our mission and vision every day.

Okay. Great. Thank you very much for the guidance, and I wish you the best of luck for the next Q3.

Next question is from the line of Lalit Deo from Equirus Securities.

Congratulations on a great set of numbers. Sir, just on the first data-related question. So like this quarter, we are seeing that yields have remained stable. So could you just give us the segment-wise yield? Second, we saw an increase in the other expenses materially during the quarter. So what would be the reason for the same? And sir, just last -- I'll ask you third question later.

So the equity yield for the quarter was around 58 basis points. The debt yields were around 27, 28 basis points. And liquid again has been stable at around 12, 13 basis points. So that's the one for the quarter. On the expenses, so actually, the other expenses have increased from INR 87 crores to about INR 101 crores on a year-on-year basis, right? And that's an increase of about INR 14 crores. Our revenue for operations during this period has increased by INR 139 crores to INR 1,026 crores. So this increase in other expense is mainly on account of business promotion, and CSR expense. Actually, CSR, which is a mandatory spend, contributes largely to this. What was his third question?

Navneet, do you want to add on expense?

Sure, sure. So over the last 3 years, our business has grown significantly across every dimension. You have been seeing the numbers. Our AUM has expanded from INR 4.2 trillion to INR 8.7 trillion, almost double, and the number of investors has also more than doubled from 6 million to 14.5 million. Team has grown, you have seen in the presentation, from 1,233 people to 1,700 plus now. And we have reinforced our culture of ownership through ESOP and PSU grants in 2023 and then 2025. We have talked about it earlier. We have expanded our reach significantly. I mentioned earlier that we have added 50 new offices across the country. We have deepened our presence. We've also made significant strides in digital and technology, which enhances the investor experience, partner experience. We have automated a lot of our -- I mean, the internal processes, trying to build a more and more data-driven organization. And during this period, we have launched a large number of new products across both active as well as passive categories, diversified our business footprint by setting up our alternative platform, expanded international business with the establishment of the subsidiary in the GIFT City. And all of this growth and all of this investment in the future, the cost has remained well under control. I mean just 11 basis points probably makes us one of the most efficient asset managers in the world as far as costs are concerned. And I would also like to request that look at absolute numbers. Our spend for the quarter ended September '22 was INR 156 crores. And this quarter, it is INR 246 crores. So INR 90 crores extra when AUM has doubled and number of customers have increased 2.4x, I mean, the number that I gave you earlier. So seeing in that context, I think we have been running an extremely tight ship. We have been very proven. We have been very concerned in our spending. At the same time, continue to invest in the future. I mean, we have a very optimistic view about the growth trajectory of this industry in India, the potential that we have. So continue to invest at the same time remain extremely cost conscious.

Lalit, that addresses the question?

Yes. So actually, because I was asking from a sequential point of view because there were still some onetime -- there seems to be some increase in that cost line item, like on a sequential basis, but yes, I guess, that's it.

Yes, that is largely on this promotion and CSR.

It is CSR and...

And sir, just lastly, on the distribution side. So we are seeing some strong growth from this direct channel point of view. So just wanted to understand like whether this would be mostly attributable to the fintech channel only? So is it most -- like the whole of this growth is funneled through the fintech? Or is it also due to the fact that we have been adding a lot of employees on the sales side? So will that be also -- or is that also a significant portion of this mix?

So direct includes three things. One is, most of the fintechs who bring clients in the direct plan. Number two is a direct clients who may come to our portal or through the app or visit through the branches. And third could be RIA, registered investment adviser, who charge fee from the client while put money in the direct plan. So it's a combination of all three. Over the last couple of years, we have seen significant growth in the fintech as a distribution channel. They have emerged as a vital channel for the mutual fund industry. And they've played a significant role in expanding the reach and accessibility for investors. If you look at last 6 months or so in the current financial year, they've registered 15 million SIPs. So they've become quite big and have built a strong presence among the investors of all cohorts. We have a very strong presence on leading fintech platforms. So we have notable share both in the new flows as well as SIP registrations. I would add on direct, you need to keep this in mind that it is natural for the share of direct plan to rise gradually over time. Also because of the lower total expense ratio of direct plans compared with regular plans. So there is a difference between the TER of regular and direct. So to that extent, it will keep inching up every quarter.

Next question is from the line of Harsh Modi from JPMorgan.

The question is more regarding the market share over next, let's say, 12 to 18 months. Fantastic traction over the last 3 years, as you said, across asset, across customers. How does that extend, let's say, over 12 to 18 months purely on market share? And if you could break it up between equity and the fixed income and liquid portfolio, that will be great.

Sure. So the way we monitor at our end is, we look at market share across asset classes. We look at market share across our distribution channels, market share across products, market share across geographies, and we try our best to optimize or maximize our market share across all of this. Fixed income, which is relatively more institutional, we enjoy best relationship with most of the institutions, family offices, corporates, treasuries, et cetera. And over a period of time, idea is that how do we promote fixed income among the individual investors also. Relative to participation is less, but we see a lot of opportunities particularly through the hybrid funds, asset allocation products, et cetera. On the equity side, overall, I mean, we have the full product bouquet, performance track record. You can see, I mean, we have been doing very well and, of course, have a long-term track record. And continue to work hard on all channels and across all geographies to get best possible share. Does that answer your question?

Harsh, can I request to unmute your line please? Due to no response, we move to our next participant. Next question is from the line of Prayesh Jain from Motilal Oswal.

Just on the expense front again. This business promotion -- increase in business promotion sequentially is mainly led by the new scheme launches, and so whether that's a sustainable increase? And the CSR, obviously, generally it's lumpy in nature. So could you highlight as to what is the sustainable kind of mix of these onetime bumps? What would be the sustainable run rate on the OpEx front?

So I would request you to look at OpEx on an overall annual basis. And broadly, we've been discussing this on past calls as well that between 12% to 15% is what we should expect OpEx to grow. Certain quarters, you may spend -- in this quarter, there was also a CSR expense, which is mandatory and there were some NFOs and new business promotion, which we spent on. So on an annual basis, if you look at the sustainability -- on a sustainable basis, 12% to 15% of OpEx is something which we would look at from a growth point of view.

It's come down from 14 basis points to 11% and that 11% includes the ESOP cost additional. If you adjust for that, Naozad, it would be 10 basis points.

Yes, it is.

So it's phenomenal, but we always want more, right?

More growth or...

Both.

That's what we have been delivering for decades. Thank you.

The other question was on the alternate side of the business. Could you apprise us about what's the kind of AUMs we built across alternate channels? And what's the kind of growth we've seen there? What are the plans going ahead?

Sure. So our alternatives platform has been building traction and continues to grow. We've strengthened our investment capabilities in this space, including bringing onboard a dedicated team to drive upcoming AI initiatives and deepen our expertise. We have onboarded a couple of more people on the investment side, on risk side, product side. Last year, we closed our first category to AIF, a fund of fund of around INR 1,200 crores and are now in the market with our performing credit fund, which has seen a promising start to fundraising. We are in the final stage of discussions with a large global investor for participation. Meanwhile, in our PMS business, we are steadily expanding on the strong foundation we have built, looking at both discretionary as well as nondiscretionary offerings. We strengthened our team, again, by hiring Ashish, a highly experienced professional who has worked with reputed sell-side firms and more recently with a top-tier AMC. On the international side, you asked so under our GIFT City platform, at present, we have 5 active funds, one of which we launched during the last quarter. These are the feeder funds into our mutual funds. Additionally, work is underway for launch of inbound funds as well as for outbound strategies. In our partnership with UBS Asset Management, both the mandates, India, small and mid-cap and India All Cap strategies, where we act as investment adviser, it's gone live a few months back. There is continued distribution and institutional coverage and engagement for both the strategies across geographies. So we remain committed to seizing any opportunities to drive growth and strengthen our competitive edge.

So just on extending this point, 5 years down the road, do you think that the alternates can be like a 10%, 15% contribution to the overall revenues for HDFCAMC?

I wouldn't give that forward-looking statement. All I can say is that we are putting a very solid foundation. And whatever it takes, the best-in-class investment capability, best-in-class risk management capability, product capability, we are putting. And we have the distribution might, which you all are aware of. We enjoy a great brand, HDFC, where comfort of both individual investors, which include HNIs, ultra HNIs, family offices, et cetera. And on the other side, institutions, both domestic and global have deep comfort with. So we remain quite optimistic in terms of our journey on the alternatives. The other thing we believe that being part of the HDFC Group, we have tremendous responsibility on our shareholders to ensure that the whole alternative industry in India, the whole ecosystem develops well, and our team members also spend a lot of time engaging with various stakeholders to ensure that over the next several years as alternative industry grows, we play a leadership role, the way we have done on the mutual fund industry side, and we are reaping the benefit today. The way industry has grown, we remain very optimistic on the alternative side as well.

Sir, Just last bit. When we talk about cost also, there will be some burn right now going into alternates business. And is there a way to quantify it where you can highlight that, okay, so far, the alternates business is running at an annualized cost of X rupees. So that will help us understand the profitability of the core business as well.

So you're calling it burn, I'm calling it probably one of the best investments we are making in the future.

Absolutely.

Next question is from the line of Madhukar Ladha from Nuvama Wealth.

See, one, on net inflow market share, reverse calculation suggests that you continue to do sort of quite well there, maybe, but if you could add some color what is driving that and some trends on that, that will be helpful. Second, see, the admin and other OpEx has gone up. Can you sort of quantify any onetime expense here? When you give a guidance of about 12% to sort of 14%, 15% increase year-over-year, that would also include any NFO related expenses, et cetera, right? So the right way to look at it would be last year's number plus 12%, 14% -- 12% to 14%, whatever that number comes, and that would include everything? Or will there be some sort of onetime NFO or any other related expenses? Some clarity on that, that would be helpful.

I mean we have continuously been invested on many things that I mentioned before. We had two NFOs, and both were like quite successful, one fund of fund and one was the HDFC Innovation Fund. Probably it was, if I correctly remember, the largest NFO of the quarter and the Diversified Equity All Cap FOF, which has also kind of got good response from our investors and distributors. So those were the NFOs during the quarter where some bit of spending would have gone. Otherwise, as Naozad mentioned earlier, it's on account of higher CSR expense, some bit of other business promotion and the general business-related expense. Your first question was on?

Net inflow market share?

Net inflow, we don't share. There is so much information is on...

Yes, but in terms of trend...

But from a trend perspective, I mentioned that I think the engagement with distributors have been great. We keep trying to maximize our share with each and every one of them. Work at like, as I mentioned earlier, every asset class, every product, every geography, every channel partner and of course, on the direct side. So continue to kind of work on maximizing our share.

And a lot of the market in general is positively surprised with the strength of the SIP numbers despite now 1-year returns not being that attractive. And normally, what I've heard from a lot of companies and also distributors is when 1-year sort of returns are not that good, that's when sort of SIP numbers start -- can get weak. I wanted to get your comments on this? And as analysts, like what should we look at and what's driving the strength?

So if we look at the SIP book today at over INR 290 billion, it was INR 40 billion in 2017 or so. And over a period of time, it has steadily been increasing. And I mentioned this before that there are many factors at play. First and foremost is the long-term track record. Now investors can go back and see last 20, 25 years, I mean some of HDFC funds have a track record of 30 years and can go back and see across cycles, how funds have delivered. Second is the transparency. I think over the year, thanks to the efforts made by regulator as well as the industry at large. All of us have worked very hard to build more transparency, more trust in the product. Third, I would say technology has played a big role. We have like doubled our unique investors in the last 2, 2.5 years, that wouldn't have been possible but for the technology. And fourth, last but not the least is I think the effort that all of us are putting on investor education, the efforts made by AMFI collectively for collaboratively that we do as an industry. And each one of us within the industry, the efforts we have been making to reach out to a larger number of investors, conveying the message of long-term investing, power of compounding, don't get swayed by the volatility, invest for the long term, invest for your goal, so on and so forth, the importance of asset allocation. And the steady increase we are seeing in SIPs reflect the growing maturity and the long-term orientation of investors that Simal also talked about earlier. So on that part, I'm very optimistic that over a period of time, there is potential for it to increase. There will be some cyclicality. We have seen that before. And maybe month-to-month or quarter-to-quarter, some bit of volatility inflows, but the heartening feature of flows is increasing amount coming through the monthly SIP. Number of accounts also, you should notice, they've also been growing quarter after quarter.

Next question is from Mohit Mangal from Centrum Broking.

My first question is towards the B30. So last month, SEBI reintroduced new incentives of B30. How do you see this? And maybe if you can quantify if there's any sizable impact on our top line because of that going forward?

Yes, so I mean, we are yet to get the final guidelines on that in what manner and what shape it will be implemented. We heartily welcome SEBI's guidance on that to increase both number of women investors as well as new investors from B30 towns. In fact, over the last couple of years, we have seen greater traction in flows, particularly in the form of SIPs coming in from B30 towns. We remain fully prepared, both in terms of our physical presence there. And being part of HDFC Group, our brand and the overall ability to make the most of it as and when the opportunity arises to do something more with our distribution partners.

Understood. So it's not still in practice, you mean?

Not yet.

Okay. My second question is towards the investment book. So I was looking at your press release and your investment book actually declined in September '25 as compared to March. So what could be the reason for that?

We paid the dividend out in June, right?

Okay, understood. Last question is about the NFOs. You said we launched on 2 NFOs, basically. What is the pipeline? Because we do have a comprehensive product book here. But do we have any pipeline for the future?

The current product lineup is more or less complete, given the SEBI classification and within that, the products that are allowed. While I've said before also that our portfolio is largely complete, but opportunities continue to emerge whenever we see the right fit for the customer such as the recently launched innovation fund where we saw very good interest, and we got INR 24 billion in the NFO. It was the largest equity-oriented NFO in the quarter. And we also launched a fund of fund, which was HDFC Diversified Equity All Cap Active FOF, that raised INR 11 billion. On the passive side, we have launched a lot of products, but will be on the lookout if there is any more opportunity on that. I would mention that, I mean, many of our existing funds have plenty of room to grow. So our focus is on strengthening their position and scale. And I'll give you one example. If you look at our value fund, that is an AUM of around INR 7,000 crores. It's not yet in the top 5 of its category, even though it has a very strong long-term track record. So there's significant potential to move it into a leadership position. But at the same time, our teams are scanning the market for new opportunities. And then I've always mentioned that at our end, new product offer is always guided by what our investment team believes in rather than what's selling in the market and what's the latest fed. We actually look at what's the best fit for the investor and the belief and conviction and capability of the investment team on the other side.

And then my last question is that, I mean we always maintain that HDFC Bank's low market share is higher than the book market share. So that even continued this quarter as well, right?

So first, just to clarify, the pie chart that you see represent how our AUM is distributed across all channels, that includes direct, MFD, ND, banks. It does not indicate market share in any channel. So possible for one channel to go at a faster pace, there are other, while our overall market share across both remains unchanged. The HDFC Group continues to play an important role in our growth, and we have a healthy flow share from them. And then they are a force to reckon with in distribution. They remain a key partner for us. And we see a lot of opportunity to further deepen and expand this relationship. Our major focus with the bank has been on the SIPs, penetration of SIPs among their clients, and it's yielding encouraging results. Market share in the new SIP is higher than our book share substantially. So yes, there is a strong intent to build tighter alignment and have greater collaboration across various touch points between HDFC Bank and us.

Next question is from Dipanjan Ghosh from Citi.

Two questions from my side. First, if you look at across channels, obviously, your market share has been holding up well on the active equity side across most of the channels. But if you were to kind of look at, let's say, the past 12 months or 18 months, has the trajectory of improvement or shift in your market share across all the channels been similar? Or do you feel there are 1 or 2 channels where you can probably kind of scale up a bit more? And if so, what would be the strategy around it? The second question is more on the cost side of things. So just wanted to, again, get some color on in terms of currently building capabilities on the alternate side or even on your investment management team on the mutual fund business or expanding our sales capabilities, how should one think of incremental employee additions over the next, let's say, 2, 3 years?

So incremental employee addition has been -- you mentioned about the people that we have hired on the alternative side, on international side in our digital and tech capabilities. And of course, a larger number would be in sales and client service apart from investments. On the expense side, I mentioned, so all of these investments, whether an increase in people, whether an increase in number of offices, whether in building more capability on the alternative PMS, AF side, I mean we have got 6 investment professionals on the VCP side and 6 on the credit side. We have built like having capabilities across the board, and all of this is already part of the cost structure that you are seeing. And I mentioned earlier that ESOP is -- I mean, we remain fully committed to retaining the best talent and you have seen recently the new ESOP and PSU initiatives in addition to several ESOP programs we have implemented in the past and that cost is also part of the overall cost that you are seeing.

Dipanjan, a large amount of heavy lifting has already been done in terms of investment side of things.

On the channel share, so yes, we are healthy across the board, whether it's MFDs, whether it's NDs, whether it's banks, which includes HDFC Bank and direct and fintech. Of course, some of the banks, which either have a closed architecture or a guided architecture, our market share wouldn't be higher relative to their own AMCs. But otherwise, yes, we enjoy healthy share across all channels. But of course, aspiration is always to get more.

Next question is from Abhijeet Sakhare from Kotak Securities.

I have a question on yields. So if I go back to your comments from last couple of quarters, it looks like the equity yields have kind of stayed at those levels around 58%. But if I look at the equity AUM growth, right, for example, let's say, from March until now, it's like almost 15-odd percent. So I'm just trying to understand, between, let's say, commission cuts implemented last year versus the telescopic repricing, I mean, how do we understand this movement over the last 6-odd months?

So that rationalization has clearly helped us in reducing the impact of telescopic pricing. But margin compression from telescopic pricing is inevitable and remains an industry reality. So we recognize that TER will structurally trend lower over time, and we factor that into our pricing decisions on the new flows. I must mention this, Abhijeet, the one metric that I keep a particularly close eye on is our operating margin. we have typically operated in the 33, 35 basis point range and the objective is to stay within that corridor, though that's not always straightforward. You have seen a significant increase in the equity AUM due to MTM as well as those. So what happens, that asset mix improves with higher equity AUM, so there is an impact on the equity margin. But the asset mix improves and we are able to rationalize on the cost side in terms of cost basis point -- as a basis point, cost as a basis point of AUM. So the operating margin, we have been able to maintain in that range. Also I should mention, we don't give margin in isolation. It's simply an outcome. The real focus is on expanding absolute profitability. And I assume you would agree that that's where our real focus has to be in.

Sir, sorry, one clarification. Would it be fair to say that the entire commission cuts was fully absorbed by the March quarter? Or some of it has flowed through in the first half this year as well?

No, it will be there every quarter, right, Abhijeet, in sense, we cut it in August last year, right? So basically, the numbers are rationalized last year. So numbers from there on have been rebased. Abhijeet, what you've seen is, I think, Navneet touched upon, right, between March and now, when you're talking about increase in equity AUM, but the asset mix also has got tilted in favor of equity further out from 63-odd to 64-odd percent. So that has kind of kept the revenue margins at that 58% kind of a number.

Okay, I'll revisit this later. And just one smaller number question. So this employee cost of about INR 124 odd crores, fair to assume that this is more or less like the base for the rest of the year or the quarter?

So Abhijeet, we had disclosed in the previous quarter, since we did the issuance of ESOPs in the June quarter, there is a particular amount of Black-Scholes amortization that will happen, right, in the books. And we had given out those numbers in our previous call, which should be in addition to the normal employee cost. This is a onetime noncash amortization of Black–-Scholes call. If you want I can just give you the broad numbers again. The noncash expense on account of ESOPs only I'm talking, for the second half of this year would be around INR 42 crores. For FY '27, we think it's about INR 67 crores. For FY '28, INR 53-odd crores. The details of FY '29 about INR 33 crores and it tails off after that. These are again broad numbers. A lot of things go into this, but this is a broad amortization, noncash expense on account of stock option.

The next question is from Ranvir Singh from Yashwi Securities.

Sir, I just wanted to understand, does the yield of the AMC defer if someone subscribes for a direct plan versus a regular plan?

The management fees remain remains the same.

Sir, Pardon, I couldn't hear you.

So management fees are the same whether you come in for the direct plan or the regular plan.

Okay. Sir, my next question is like, say, for example, a hybrid fund, which has like 60% in equity and 40% in debt, so to think of the yield, would this be the right approach that we think 60% of 58 bps and 40% of 28 bps would be the blended yield for that product?

Anything above 65% -- so equity-oriented hybrid funds, the fee structure is aligned with that of equity schemes. So when you look at a hybrid, equity-oriented hybrids will be at 58 basis points.

It's minimum 65% equity, yes.

And sir, just a last question, sir, the noncash expense, ESOP you said, it's INR 42 crores for this year. Sir, how much of it has already come to a PL account like this quarter?

I'm talking this for the second half.

For the second half, okay, sir. Happy Diwali.

Thank you.

Next question is from Vinod Rajmani from Nirmal Bang.

Most of my questions have been answered. But I just wanted to know, what is the philosophy around the new SIF plans, which many AMCs are planning to launch. I mean what kind of time line do we have in case we are also planning to go down that path? And what kind of yields could that benefit for us?

So we already have approvals in place for launch of SIFs. We want to be full service providers across categories, say, active, passive alternatives and even the newer categories as they emerge. We're watching the space closely and will decide on how we want to progress on this front. Team here is evaluating all possible options and products that can be well suited for our client segment. So you will hear more from us on this front going forward.

Thank you. As there are no further questions, I'll now hand the conference over to Mr. Navneet Munot, for closing comments.

Thank you. So in summary, while equity markets softened in Q2 FY '26, the mutual fund industry continued to demonstrate resilience, supported by record SIP flows and steady equity fund inflows. I salute the resilience and maturity of Indian investors supported by distribution and advisory partners. HDFC AMC's AUM stood at INR 8.7 trillion with a steady market share. We remain the most preferred choice among individual investors with a market share of 13.1%. Our investor base reached 14.5 million unique investors, that represents a healthy 25% penetration. That's on the mutual fund side. And we have been progressing very well on our initiatives in PMS, in alternatives and international business. We're wishing you and your loved ones a very happy Diwali and a prosperous New Year ahead. Thank you for your time today.

Thank you very much. On behalf of HDFC Asset Management Company Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.