Mutual funds have declared huge profits for the financial year 2009-10. With equity assets surging in the last one year, profits have grown at a rapid speed for top mutual funds. HDFC AMC and UTI MF were the only two players to report a profit after tax in excess of Rs 200 crore. ?Our equity base has grown at a modest pace contributing to profitability? said UK Sinha, CMD of UTI AMC, without confirming the numbers floated by our sources.
While HDFC AMC reported a profit after tax of Rs 208.4 crore for FY10, it was around Rs 200 crore for UTI, Rs 183.9 crore for Reliance Cap Asset Management and Rs 128 crore for ICICIPru AMC. The next in line was Kotak mutual fund, which reported a PAT of Rs 72.5 crore followed by Birla sun Life AMC at Rs 48.4 crore. Profit figures have more than doubled for players like Birla Sun Life and Kotak, while ICICI Pru figures are not comparable because of one-off expenses debited in 2009. ?We were in an investment phase in 2009. So, partially the jump in profits have to do with the low base effect? said A Balasubramanian, CEO of Birla Sun Life MF.
Big mutual fund houses had equities assets of at least 35% of their overall assets; in most cases these equity assets had doubled over the year. Equity markets have rallied since it hit the lows of March 2009 and ever since Sensex has gained 70%. This, in turn, has boosted equity asset base for AMCs.
It is not just the MF assets that contribute to its profitability. Many players also have portfolio management services , offshore funds, property funds that also contribute to its bottomline. For instance, out of Kotak?s Rs 45,200 crore assets under management, 5% constituted the PMS assets and another 16% the offshore funds.