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Performance and SIP flow a key monitorable

CRAMC saw a good quarter; as core PAT was a beat due to better revenue yield at 39.2bps (PLe 37bps) mainly led by effective control in TER related costs. Company expects blended yields to be within a band of 35-38bps. Cost to income for FY27 is guided to be between 38-42% (41% in FY26). SIP flows fell by ~5% QoQ, which was attributed to industry-wide decline led by volatile markets. We are watchful of equity performance and net flows, as re-rating would hinge on the same. We raise revenue for FY27/28E by avg. ~5.5% as we increase yields. We tweak multiple to 21x from 22x on Mar’28 core EPS but raise TP to INR 285 from INR 280. Retain ‘HOLD’

Core PAT beat driven by better revenue yields:

Equity QAAuM was in-line INR 1,089bn (+1% QoQ). Revenue was 5.8% higher at INR 1.16bn (PLe INR 1.10bn) led by better revenue yields at 39.2bps (PLe 37bps). Opex was in-line at INR 465mn (PLe INR 458mn) due to higher staff cost offset by lower other opex. Staff cost came in at INR 282mn (PLe INR 267mn); other opex was lesser at INR 183mn (PLe INR 190mn). Core income was an 8.8% beat at INR 697mn (PLe INR 641mn) resulting in operating yields at 23.5bps (PLe 21.6bps). Other income was ahead at INR 296mn (PLe INR 250mn). Tax rate was inline at 24%. Core PAT was a 9% beat at INR 530mn; core PAT yields came in at 17.9bps (PLe 16.4bps). PAT was INR 756mn due to higher revenue and other income.

TER restructuring drives better yields; SIP flows decline QoQ:

Revenue yields improved QoQ from 38.8bps to 39.2bps driven by

(1) likely minor rationalization in distributor commission

(2) market correction leading to increase in TER

(3) effective control in other costs that are part of TER. Management highlighted that TER mechanism has been restructured in a way to benefit AMC as well as distributors. CRAMC expects blended yields to be within a band of 35-38bps, while equity yields to range ~36-40bps. SIP flows declined QoQ by 5% in-line with industry due to market volatility. Management efforts are ongoing towards enhancing SIP flows. Market share in SIP is 2.2% as of Jun’26 vs stock equity market share of 2.4%.

Cost to income to remain steady; focus on equity scheme launches:

Other opex fell to INR 183mn from INR 219mn in Q4FY26, that included NFO related one-off expenses. C/I for Q1FY27 stands at ~40%, with FY27 C/I expected at 38-42%, giving headroom for tech related costs. NFOs are planned in next 2-3months with general target of 2 NFOs in a year; passive/SIF launch would happen post MF scheme launches.

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