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 over this call 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. Thanks. Thanks, Navneet, and good evening, everyone. The industry continued its upward journey and, closed the quarter with AUM of INR 61.4 trillion, signifying sevenfold increase over the last 10 years. To put things in context, the size of the mutual fund industry as a whole was about INR 8 trillion as on 31st March, 2014. And now we have seen industry adding over INR 10 trillion in last 6 months. June 2024 was the 40th consecutive month wherein equity-oriented funds have witnessed positive net flows. Actively managed equity-oriented funds saw net flows exceeding INR 1 trillion in the quarter ending June 2024, with INR 262 billion of this amount contributed by 17 equity-oriented NFOs. Debt-oriented funds, including debt index funds, witnessed net inflows of INR 709 billion for the quarter, marking a turnaround after three consecutive quarters of outflows. Additionally, debt ETFs saw net inflows of INR 20 billion, bringing the total net new flows into debt to INR 729 billion. Liquid funds also recorded an addition of INR 510 billion during the quarter, again, following three consecutive quarters of outflows. These flows in debt and liquid funds are similar to those seen in quarter ended June 2023. The following three quarters were net negative flows. Also, over the last three years, the debt and liquid fund categories have collectively witnessed outflows totaling to about INR 2,650 billion. Monthly SIP flows have continued their upward trend, INR 213 billion for the month of June 2024. This quarter saw an addition of 2.3 million unique customers, new unique customers. Now we move to us. We surpassed INR 7 trillion in AUM. Our asset mix has continued to further tilt towards equity, now at 64.3% on a quarterly average basis. On closing AUM basis, actively managed equity funds have grown to INR 4.4 trillion, market share of 13%. Debt and liquid AUM has seen a Q-on-Q increase of 9% and 14%, market share of 13.5 and 12.7 respectively. We continue to be the most preferred choice for individual investors with market share of 13.3%. Our unique investor count reached 10.7 million, which takes our penetration in unique investor base to 23%. This quarter, we added 1.1 million unique investors and industry added 2.3 million. Systematic transactions for June 2024 stood at INR 32.1 billion. About financials, our total income adds up to INR 9,483 million. Revenue from operations increased to INR 7,752 million, a growth of 35% YOY. Operating profit grew by 40% YOY, PAT at INR 6,039 million, a growth of 26% YOY. Thank you, and we can take questions now. Neerav, we can kind of start building up the question queue. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Bhavin Pande from Athena Investments. Please go ahead. Hi, good evening, everyone. Congratulations on the great set of numbers. I just had- Bhavin, your audio is coming a little feeble. Can you speak through the handset? Yeah. Yeah. I'm at the handset. Am I clear now? Yes, thank you. Yeah. So, congratulations on great set of numbers. First thing, so the employee benefit expenses, they have gone up. I'm assuming it's on account of, variable payouts that happened in Q1? Yeah. So that's, employee cost is a function of, you know, year-end increments, actual increase in the headcount we added about from the, Q1 of last year to Q1 of this year. There is a employee headcount, which is 280 people. We invest in learning and development, employee engagement, et cetera. So that's an overall increase. It's not just performance-based. Okay. Secondly, other expenses have also shot up. What could be attributed to that? Yeah. So the increase in other expenses is mainly on account of increase in general business data expenses. There was a new fund offer expense. There are certain KYC related expenses for mutual funds and outsourced service costs. So these are the three or four major aspects. YOY there's been increase in expenditure. We had a manufacturing NFO during the quarter, and that, that does have some extra cost. And we are sure you appreciate the NFO expenses are not bad in a, in a sense that there is an additional AUM that will set us not really higher fees than costs incurred as we go forward. Yeah. Okay. Understood. And in terms of branch expansion, so we added one for this quarter. So would you like to give out some number in terms of annual addition that we could look at for FY 25? No, we had 24 branches that we opened in the first week of January. I think in the next 2 weeks or 2 months, I mean, we don't have plans to add many more, yeah. Okay. Okay. That was really helpful. Congratulations again, and good luck. Thank you, Bhavin. Thank you very much. The next question is from the line of Ujjwal from Dolat Capital. Please go ahead. Hello. First of all, congratulations on the set of numbers. I have two questions, actually. The first question is, currently, I've seen that the percentage of asset under management in equity funds stands at 60%, that is, up from across 39% a year ago. I wanted to ask, like, can you elaborate on the strategic considerations behind the shift and share your projections, whether this is likely to increase, decrease, or, like, remain stable in the foreseeable future? So, so I think the way we kind of look at assets are between equity-oriented. So, if you just add up the equity-oriented assets for us is, 64% odd. So we are nearing, nearing a 64-65% mark when you look at purely equity-oriented assets for us. So you are saying where, where we expect this to go? That, is that your question? Yeah. Yeah. Equity is like the asset under management in equity. So, like, is it likely to increase, or we expect it to, like, see remain stable considering, like, in the foreseeable future? And if you can give any guidance upon, like, the fate of it on the margin part. So while we want to grow all our segments, but you would appreciate that in case of equity, the two variables: number one, the Mark-to-Market gain would relatively be higher than other asset classes, that will push the equity proportion higher within our overall AUM. And second is the SIP book, which is now a very large part of the overall flows. So a large part, in fact, bulk of the SIP flows are into equity funds. So the equity proportion by that should increase at a faster pace. But as I mentioned earlier, our intent would be to, like, grow all our segments of business, including fixed income and others. Okay. Okay, got it. And, my second question was like, could you provide, any insight into, like, any upcoming, initiatives related to introduction of, new fund offers? Like, specifically, are there plans to diversify or expand this, portfolio through NFOs in the near term, like in the near future? No, we just had an NFO- Yes. -fund, which went with a huge success. After that, we had an index fund just few days back. We keep, you know, looking at our product bouquet, but to a large extent now, we believe that our product bouquet is more or less complete. We've got the full range of products across both active as well as passive side for to meet different kinds of investors' needs. But, but I consistently encourage the team to consolidate our position in the, in our existing funds and try to aim for top three positions across categories. So I think there may be few here and there, but I think to a large extent, our product bouquet is full of both on active and passive side. Okay, got it. Thank you. Also, best of luck for your future prospects. Thank you. Thank you. Thank you very much. Next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead. Yeah, hi. Just harping on the question on employee expenses again. So even sequentially, when we look at the employee expense, that is up 17% Q-on-Q. So, you know, what are the elements of each of expenses? Is there a element of each of expenses that have grown sequentially, or what is this driving this sequential increase? Because generally, I understand that your variable pay get amortized over the years, over the four quarters. So how do you read this, and how should we look at the rate from here on? So sequentially, the first impact of sequential increase is the annual increments we roll out, right, in the first, Quarter of the year. So that's one aspect of it. In and also in the first quarter, we typically have the initial valuations that come across for leave encashment and all other purposes, benefits that go in. And typically, the way it works is the valuation comes in, which is then sort of it gets used up over the rest of the year. This first quarter, we also had a large employee engagement event, which we typically do in a first or second quarter of the year. So these are the elements. I would encourage that you look at expenditure on an overall basis for an annual basis. On annual basis, I think for employee costs, we broadly would be in line with what the market would expect between 10%-12%, unless we have a very large expansion of people, which we have done over the last 12 months. This month, this year, we are still planning on expansion. Otherwise, I would just expect you to look at it on an overall basis on a year-on-year rather than on an annual basis rather than a quarterly basis. Okay. Secondly, on the tax rate, why is it low, and how, how should we look at it for the full year? We've explained this. Some of the assets that move from short-term bucket to long-term bucket, the DTA benefit comes through, which is why we had a similar setup in Q1 of last year, and, and some of it is also flowing to Q1 of this year. Okay. Got that. And, so if you, if you start looking at from a, yield perspective now, we know yield sequentially improved and we guided also, for an, for improvement in the previous quarter. But, you know, but, how has been the NFO yield in this quarter, given the state of NFOs that have come in the market? How has been the commission on NFOs? Has that been a increase in commissions? Because there are some market thoughts about, you know, some of the schemes getting, in that much lower rate than the, than the existing book. I think, Prash, more or less the newer NFOs that are happening in the market are happening in a range. It's not like something which is way off. Okay. So in the past, what we had seen was NFOs were coming at a very high commission. That's not happening right now? So NFO commissions are higher than the normal commissions, because that's what kind of tends to happen, right? The overall activity. But, as of now, what we hear from various players in the market, I think it has been fairly in the range. Okay. Okay. My last question is, will you give out the yields on each of the assets? Sure. No, you're asking about the revenue yields on equity. Yeah. So equity- Yeah. Just short of 59 basis points. Debt is the 28 fairly steady, liquid 12, 13. So, yes. Okay. Well, thank you so much. All the best. Thanks. Thank you. Next question is from one of Kunal Thanvi from Banyan Tree Advisors. Please go ahead. Hi, thank you for the opportunity. So I had this question on, you know, employee additions. So if you look at our, you know, last 5, 6 years employees, they were kind of, you know, number of employees, they were flat around 1,150 to, you know, 1,200 mark. Last 2 years, we have seen reasonable increase in, you know, number of employees, and, Naozad stressed upon, you know, we are looking to hire more this year. Can you talk to us about, you know, what are the areas where we are hiring these employees? And because, you know, typically we would, like, nature of our business is that you don't need at least, large number of employees to grow our business. So, if you can, you know, throw some light on areas where you've been hiring these employees. So, Kunal, as you are aware, we added 24 branches this year. This would have been like a substantial branch expansion after a long time. We have set up a dedicated channel to service HDFC Bank. This is a big opportunity for us over the next several years. Similarly, like we set up few other dedicated channels where we see opportunity for us to grow. We have expanded our technology team, our digital team. We've hired five investment resources in our alternative business. We have ambition to grow our international business. So I think also roughly 280-odd people that Naozad talked about, that we have added over the last year to meet all of those evolving business needs. In fact, I do see the need for further investment in the tech on the digital side, but they won't be, like, substantially large in numbers in terms of people. But, yeah, that's where we would add some more talent. But a very large part would be in our sales, core sales and client services. Sure. In terms of numbers. Sure. So when you talk about these branches, can you help us understand, you know, what is the, you know, concept of these branches? Are these like very large branches or, you know, low, like, large number of people in a branch? What would be the typical size and, you know, how do you construct these branches in a way, you know, from the unit economics point of view? No, so the new branches we put up, when we see a certain size where we can break even very quickly, we look at the overall AUM in that area and to service the catchment area and relative to our distribution there. And these are the, like, 2, 3 people branches. Sure. And most of them are in B30 locations. Sure. So the cost structure is not very high. You would appreciate that in most of these places, you don't pay a very high lease rental or even the people cost is not very high relative to the potential. And I'm sure all industry data that you would be looking at over the last several quarters is a substantially higher growth in the percentage growth- Sure. in B30 towns. And given our brand and franchise having a pedigree, we believe there's a lot of potential for us to take the most of the opportunity that available today. Sure. And like a further follow-up on this, like when we look at HDFC Bank, you know, one big advantage, of course, is their branch network, right? They are like huge, largest private branch network in the country. Now, with our branch network and their branch network presence, how do you know, one read into it, like, going ahead as well? And you talked about, you know, adding employees for HDFC, you know, bank channels. Can you talk more about it? You know, what kind of support or, you know, what kind of engagement that is? No, we operate independently. People don't sit in those branches. But when we are opening branches or when we are hiring people, not only in the newer location, but even in the existing locations, we keep in mind the spread of HDFC Bank in that area. As we have been mentioning over the last couple of quarters, that we are very excited about the opportunity that HDFC Bank as a distribution partner presents. The management team at HDFC Bank, I'm sure you have heard from them, has been very supportive of all our initiatives. They have a formidable distribution machine, and we won't leave any stone unturned to capitalize on it.... In fact, I might have mentioned in the last call that we have a dedicated senior resource overseeing this relationship, and we have strategically matched their branches and clusters with ours. And that strategic alignment has not only strengthened our relationship, but has also deepened our engagement levels. And I'm personally very involved on a regular basis, even across levels and functions there in HDFC Bank, and I can clearly see there is a lot more, lot more alignment. Sure. Thank you. One question was in from our annual report, right? We talked about the fact that, you know, we are taking strides from client service to client delight. Can you talk more about it, you know, give some anecdotes, pointers, which can help us understand how, you know, what and how we are, you know, making this journey from client service to client delight? No, many things. We need to constantly keep benchmarking ourselves, the way we are servicing our partners, the way we are servicing our clients. And we have done a lot of benchmarking exercise over the last two years or so. And based on the feedback, both, I mean, what has come out of this, benchmarking exercise and even otherwise, from our people on the ground, we have continuously been trying to upgrade, our, our, you know, service levels to, to them. Be it in terms of training of our people there, be it in terms of the way we respond, reducing the turnaround time, for every, you know, the request from the customer. There are many things that we have done. There is tremendous focus on how do we digitize all our operations more and more. We regularly keep looking at the percentage of transactions, both the financial transactions and non-financial transactions, that come in the digital form, so that how we can reduce the turnaround time as well as improve the client's experience. We initiated an MD award system, which is a fairly objective one, and there is a very healthy, I would say, competition among various zones and clusters to kind of outdo each other in terms of providing better service to their clients. And lot of this is also driven by the huge amount of analytics that we are putting in place to kind of like measure our effectiveness. Sure. Looking at, like, each channel, so the way we serve, let's say, our mutual distributors who work through the particular, the way we service our banking partners, the way we service our mutual fund distributors, who have been very important, but very large in number, the way we service Fintech, so on and so forth. Sure. That's helpful. And one question, you know, like as an, you know, Indian CEO of an asset management company, when you look at, our business, you know, from a near-term perspective, where, you know, markets are on a slightly overvalued zone, like there, you know, continues to be on the overvalued trajectory. Some pockets are like, you know, maybe in bubble zone. How do you look at... Because, you know, our earnings from a year or two years perspective, because, because the equity portion has become like one of the, highest in our own history, like 64% of our total assets, right? How do you look at, you know, earnings from a two to three years perspective? Because at the end of the day, equity markets are cyclical, and they, they are, you know, reasonable probability that markets may correct and, you know, because of any reason that we don't know today. Any thoughts on how you look at, you know, this? So we all take a lot of pride and you know do this transformation in the industry in terms of the way AUMs have grown. People mentioned about that number, that our growth in last six months is almost same as maybe the area which was there a decade back or so. But we also need to keep in mind that still a very tiny proportion of household wealth is coming to mutual funds. All said and done, while we have added good number of investors in last three or four years, but still the total count is 47 million, 4.7 crores. Even if we look at number of investors who are participating in capital markets directly, there's still a lot of potential for us, and I'm not going into all the other numbers that we think should be our potential client base. But as the heartening feature of this growth over the last couple of years has been a large part of the money is coming in the form of SIP. That gives us a lot more confidence about the longevity and sustainability of this growth. Unlike some of the previous cycles, where people will look at this product more as a bull market product, and then they look at like, you know, entering in the market and then booking profit. This time is very different, and the way product is getting sold and a lot of contribution has been made by the AMFI's campaign of Mutual Funds Sahi Hai and all the efforts all of us are putting to educate investors or to increase the awareness about building wealth by systematic investing over a long period of time. So that gives me a lot more confidence about sustainability of this growth than most of the previous cycles. Of course, there would be cycles. I don't think that equity market, even you know this better, I mean, none of us believe that equity markets can deliver returns in a linear fashion. There will be quarters or years where markets will witness higher volatility than what we have seen of late. But I think the effort in the industry is to ensure that investors don't get swayed by the volatility. This time, we continue to ensure that investors invest in a highly disciplined manner, and we create a great experience for them over a long period of time, that they can participate in India's growth. Another interesting thing I'll add that, while you look at the growth on the equity side, but on the fixed income side, the industry hasn't grown much over the last few years. In fact, this quarter was good, but the previous three quarters were negative. So was the case last year. The same quarter last year was positive, but before that, several of quarters had negative flows. So we haven't seen flows in fixed income. There is, over a period of time, potential to look at that asset class also. The line for the participant dropped. We move on to the next participant. Next question is from the line of Swarnabha Mukherjee from B&K Securities. Please go ahead. Hi, sir, and thank you for the opportunity, and congrats on the great set of numbers. Yeah. Is this better now? Yes, slightly better. Yeah. So, I just wanted to congratulate the management on the great performance. So I have two questions. First is on the employee expense. I just wanted to confirm that the number that was reported this quarter, whether that has any component of variable cost coming from last year and it doesn't, right? Okay. So variable cost, the accounting method would be it will be prorated across four quarters. Would that be correct, sir? Yes. Okay. Also, sir, if you could, give me the number of what was the ESOP cost, that was part of this employee expense this quarter, and how should we think about it for the full year? It is there on the note. It's about- So last year first quarter. Sorry, the June quarter last year was INR 11 crore. This time it is INR 6.3 crore. Understood, sir. Also, sir, in terms of the margins, in the flow, if you could give me some color. I think on the stock you have said it is 59 basis in equity. What would that be on the flow? So Swarnabha, that, that remains constant, what we've been always stating, right? The flows do come in at a bit of a, a discount to the book. So depending on the product which sells more during the quarter, it does range anywhere in the range of, mid to late forties or something, or maybe sometimes fifties and slightly higher. Okay, sir. Was there any impact of the NFO that we concluded this quarter, on the, you know, number that we have reported? And can that kind of unwind going ahead? Yeah. So as you are aware, I mentioned earlier that we did this large NFO, HDFC Manufacturing Fund, that raised around INR 9,500 crore. It is larger. Now, you know, there is a technical challenge with the NFOs whenever we do it. We are generally able to estimate NFO raise fairly in a range most of the time. So this time, our team anticipated that we would collect somewhere in the range of INR 3,000-4,000 crore, and we announced brokerages accordingly to our partners. And to our positive surprise, the acceptance of the product was way better, and we ended up, as I mentioned earlier, nearly INR 9,500 crore. So yes, lower TER and accordingly, lower margin for us, though I would say a very good problem to have. Instead of collecting INR 3,000 crore and making 2 basis points higher, if we have got INR 9,500 crore 1 basis point lower, in absolute terms, that's a larger amount. So we do expect the margin to rise from year two, as we have sort of a step down structure from second year onwards. The fund, in fact, the fund continues to see healthy flows post NFO also. So June end, AUM stood at around INR 11,800 crore. Some part of it is mark-to-market, but flows are good too. And these new flows are coming in at AUM aligned commission. Now that we know this is the AUM, so automatically commission get aligned. So over a period of time, as we get more flows, and as I mentioned, the step down structure from year two, we do see it getting better from where this is currently. So this NFO alone would have reduced our equity margin on total equity AUM by nearly half a basis point. But as I mentioned earlier, I'm not complaining about it. This is a good problem to have. In fact, I must mention this, that you have seen some of our past NFOs, we have done you know the same at a very healthy margin. Actually, in some of the NFOs, our margins were higher than our book margin. So from that perspective, this one is an outlier, and mainly because we ended up collecting a lot more than what we anticipated, in the beginning. Right, sir. Understood. Very helpful. Sir, the last one from the industry point of view. So I think in the last three months, as an absolute number, we have seen some amount of, you know, SIP discontinuation rates in the industry going up. Although it is, still much lower compared to number of SIP accounts getting added. But just thought I would, you know, take your view on that, whether to, you know, what should we read into this? Hey, Swarnabha, it can be even the other way around, because what might happen is, if a particular fund is not performing well, people will shut the SIPs there and go to another fund. So those things also will get really factored in. But I think the way we watch this number is look at the absolute monthly flow number in SIP, and that number is growing month-on-month, right? Right. Understood, sir. So for our organization, are we seeing any such kind of trend, or it is fairly steady? So for us, I think the numbers have been fairly strong when it comes to systematic transactions. Okay, understood, sir. Understood. Thank you so much, and all the best! Thanks. Thanks a lot. Thank you. Next question is from the line of Abhijit Sakhare from Kotak Securities. Please go ahead. Hello, good evening, everyone. My first question is on yields. So when I look at, let's say, on a sample of top four or five funds, you know, which I guess, you know, attracting would be attracting more than 50% of net flows, it seems like, you know, the distribution commissions, if you look at it in, you know, basis point terms, seems to have, you know, remained broadly unchanged over the last twelve months. You know, under our understanding would have suggested, you know, maybe given that adjustment happens not on the back book, but on the incremental flows, at least, you know, some, you know, pass-through of the reduced TRs to the, to the distribution commissions as well. So if you can tell us, you know, what's the underlying, you know, dynamics that are driving this? Is it the, you know, contribution of, say, or, you know, general, you know, market trends or anything else? Abhijit, but it is getting aligned. So if you look at it, I don't know exactly how you kind of have mapped this data, but it is getting aligned. Also, the very fact that SIP also, it is, the commission rate applicable on SIP is on the date of transaction. So whatever commission is applicable on a lump sum purchase, on the new purchase happening, SIP goes at that rate, not any kind of a pre-contracted rate. Okay. The SIP you're saying the SIP commission rates on SIP is same as the rest of the book, right? There's no difference because of that. On the new flows. On the new flows. Only on the new flows- Yeah, on the flows. There are forms of offsets, yeah. But your point on the book, I mean, you have seen, like you say, distribution commission versus the trend in the TER. Of course, there is a gap, and the team is thinking of various options on how to deal with the speed of this fall. As you know, I've been mentioning that this is a healthy fall in margins, because AUM is growing at a much faster pace. So in absolute terms, this is good, but statistically, you are seeing lower margin. Are there ways to manage this? A bit early for us to further expand, but all I can say is we are evaluating all possible options, and we will further expand on this once we have clarity internally. Understood. Second one was that, you know, generally, your comments around, you know, SIP book starting to contribute meaningfully last couple of years. Is it possible to, you know, share any numbers, you know, of the new customers that we are getting? You know, how many of them would be coming to us through the SIP route itself? And this is, you know, question in the context of, you know, there seems to be a lot of, you know, performance chasing that has come, you know, into the mutual fund industry as well. So I think that would be a, you know, useful data point to have. So out of the new customers that we would have added and made in this quarter, how many of that? Good number of that. So, all I can say is whether it's a lump sum flow, the investors, the new unique investors who are getting added to the industry, in terms of putting money in a lump sum form, or investors who are starting with an SIP, in both of them, we have a very, very healthy share. The second part was that performance chasing. Of course, we have always been saying that, performance is a critical component, in terms of investors' choice of points at that point in time. Got it. Got it. That's all from my side. Thank you so much. Yeah. Thank you. Next question is from line of Devesh Agarwal from IIFL Securities. Please go ahead. Good evening, everyone, and thank you for the opportunity. So my first question is around other expenses. You did mention that there were certain NFO expenses and all that, in the quarter, which I'm assuming you don't expect to get repeated in the following quarters. So in that light, can you highlight what would be the one-off, in this quarter, which you don't think will be repeated in the coming quarters? One of the bigger one was the NFO cost, Devesh, Okay For the quarter that we incurred. We don't spell out specific costs for each item. But I think again, as I was, I would encourage you to see it on an annual growth basis, and generally, that's the way to look at other expenses as well. I think we have been broadly saying 12%-15% type of expense growth expectation on an annual basis. Understood. Secondly, Devesh, if I can come in, and in our total costs are some INR 200 crore. So every additional INR 2 crore increase, cost goes up by 2%. And look at the scale of the operations that we run and, I mean, all of... I mean, I'm sure you would agree with the growth prospects that we have, not only in the mutual fund, but in alternatives, in PMS, on the international side, and even on the mutual fund side, there's a lot more, I think, you know, that we can do to expand our market. So I would say that this is a healthy investment in the long term, rather than looking at pure cost in one quarter. No, no, I agree, sir. Secondly, sir, you did mention about the asset-wise deal for 1Q. Can you give me similar numbers for the exit run rate? As if, as on course of July, what would be the numbers? So this is blended for the quarter, and I think this is, I mean, we are, that's what we typically disclose, and I think it, it should be fine for the day. We are happy to disclose this on a quarter's average basis to you. Okay, sir. And, sir, if we were to, understand, in terms of HDFC Bank assets, for FY 2024 end, what was their total, mutual fund book? And of that, how much was invested through HDFC AMC? Yeah, around 30% in the books. But as we have been saying, our flow share has been higher, both in SIP as well as overall. What would be the size of the book, sir, for HDFC Bank? You're talking about the equity book or the overall book? The one that they invest in mutual funds. Oh, but on the equity mutual funds or everything? Everything put together. So if you look at it, right, we have disclosed all the total AUM. They are 6%, they are 6% of our overall AUM, right? So if you look at our AUM of June 2004, they are 6% of that. So you'll be able to just get that number. We have also put the number for the equity AUM, 7.7%. Understood. And, lastly, sir, if you were to talk about growth opportunity, other than the general market growth, and that is applicable to everyone. The way I look at it, one is NFOs, which you said that more or less we have already completed all our offering. There will be some, but nothing big. And the other is this HDFC Bank, where we can see the increase in the market share. Other than these two, any other opportunities that you can call out, which you will be targeting for the future? There is in our existing funds, I think several of them have tremendous potential to grow. There are so many of our products where we may not be among the top one or two or three players in that particular category. And message to the team is we need to, I mean, we must and have, I mean, our endeavor should be to have a leadership position in all of that. Now, with team diversity, we have different PMs with different styles, managing different kinds of funds. And we need to ensure that, not only at the overall level, but we should look at granular level. I mean, in every channel, every product, every zone, we look to expand in our current set of products. Right, sir. Understood. Thank you so much, and all the very best. Thank you. Thank you, Naresh. Thank you. Next question is from the line of Raghavesh from JM Financial. Please go ahead. Hi, sir. Congratulations on a strong set of numbers. Sir, only on the top line yields. So last quarter, we saw a one-off, and the expectation was that the yields would improve by around 2 basis points. I think the NFO is around 0.5 basis point of the decline. Are there any other one-offs that we can see in the yield call? This would be the trend going forward? Because if you see the quarter, the quarterly average AUM is about 8% lower than the closing AUM. If the trend were to continue, we can see a stronger decline in yields in the coming quarters in this year. No, sir, you're right. In fact, we mentioned about the adjustment in the previous quarter, so optimal would be to compare it to the December quarter. December quarter operating revenue margin then was 48 basis points, and for this quarter it is 43 basis points. But look at how the AUM has moved as compared to December quarter. Our quarterly average, active equity AUM for December quarter was about INR 300,000 crore, and for this quarter the number is INR 400,000 crore. This is a INR 100,000 crore increase in last six months. Now, at each scheme level, we would see a drop of 2-3 basis points for every INR 5,000 crore increase in AUM. The point that we have been making in last couple of quarters, purely as per the regulatory formula. Now, due to increase in AUM by about one lakh rupees, I mean, one lakh crores, many of our schemes would have seen an impact of 2-5 basis points, and some even higher. I think the overall revenue margin would have looked even lower if our asset mix would have been constant, right? Because of this one lakh crore mark-to-market gain, the equity-oriented assets, which were 60.6% in December 2023, for June is 64.3%. So part of the dilution has been set off by change in mix, and this is what we have always mentioned, that part of the dilution will get absorbed in changing asset mix. Of course, these are intertwined. Increase in AUM of one lakh crore consists of material gain through a mark-to-market and not just flows. So if market goes up, our AUM will go up and, and vice versa. And fees of margins, as we know, are inversely correlated. But as I keep saying every time, that it is not a bad problem to have. I think margins would have looked exactly flat if there was no AUM, I mean, if there was no mark-to-market growth. So it's, it's like absolute revenues over statistical margin. And we also mentioned about the manufacturing fund, where we added INR 10,000 crore, and that has led to like half basis point dilution on the overall book. But, but that again, is like a good problem to have. Okay. So, other than that, no, no, no. So this is a trend which is likely to continue with the AUM gains as they come? So that is one. Of course, I mean, as I mentioned earlier in one of the question, that we are definitely thinking of various options. Because the MPN growth has been so fast, that how to arrest the speed of this fall, while, as I mentioned, in absolute terms, we make more money, but still, margins take get impacted. And, and are there ways where we can manage this better? But as I mentioned earlier, that, little early for, for me to further expand, but- We are, I mean, our team is evaluating all possible options, and we will get back to you when we have more clarity internally. I think only thing, I would like to add here is also coming from the fact that every six months we don't see an increase of INR 100,000 crore of AUM. The speed of dilution has been more magnified because of a very rapid increase in AUM. Yes. Okay. Thanks, got it. Thank you. Next question is from the line of Dipanjan Ghosh from Citi. Please go ahead. Hi, hope I'm audible. Yeah, Dipanjan. Good to go. Yeah. Yeah. So just two questions, sir. First, you know, on this NFO that you have done in the month of May, just wanted to get some color of, you know, what would be the distinction from that particular? Dipanjan, sorry. Dipanjan, we are losing your audio. Can you please speak through the handset? Is this better, sir? Yeah. Thank you. Yeah. Yeah. Sir, just asking that for the NFO that you're considering in May- Dipanjan, sorry, but again, we are losing your audio. May I request you to come back in the queue, please? Thank you. The equity-oriented side, either this is, you know, the planning side. Into a direct channel. But, how would you, you know, kind of, kind of, discuss your MFD market share? Do you kind of track that, let's say, for the top 50 or top 100 or top 1,000 MFD, and how that is, kind of, Sir, sorry to interrupt you. Dipanjan, sorry, but we are unable to hear you. I'll request you to come back in the queue, please. Thank you. Next question is from the line of Shreya Shivani from CLSA India. Please go ahead. Hi, thank you for the opportunity. Most of my questions have been answered. I just wanted one, that clarification on the tax bit. Is this... I'm probably not able to understand this better, but is this going to be an ongoing basis, or is something that has happened in the past two quarters because of the move in from short-term to long-term assets? I mean, if you could help us understand that better, and how should we look towards the coming quarters on that matter? So actually, you know, if you see it on an annual basis, it sort of evens out more or less, right? Then the year-end changes, some of the assets do move from the short-term to long-term market. So it's not like an annual thing, and it's not like that this effective tax will continue through the year. By the end of the year, it'll get more normalized toward the overall company's tax rate. Got it. So it's probably something which impacts you toward, in, in, your quarter end, some quarter ends, right? Not something which, normalizes over the year is what you're telling, what you're saying. I think, Shivani, so what Naozad is saying is, there is... So when we make an investment from the prop balance sheet- Yeah Till it completes the period. So let's assume that we make an investment in an equity fund. For the first 12 months, it's a deferred tax needs to be accrued on the gains that have happened. For the first 12 months, it is classified as a short-term capital gain, and thereby the tax provision is made at 15%. But once it kind of crosses the 365-day number, it becomes a long-term capital gain, and there is a reversal of entry of that 5%, which reduces the overall deferred tax, and hence the tax efficiency kicks in. But as Naozad pointed out, it's not something that will happen every quarter. Over a period of time, it'll kind of get back to the normal corporate tax rate. Got it. Got it. Very useful. Thank you. Thank you for explaining. Yeah. Thank you very much. Next question is from the line of Darshan Shah from Multi-Act. Please go ahead. Yeah, hi, this is Akshat from Multi-Act. Am I audible? Yes. Yeah. So I had two questions. So, you know, Naozad mentioned two things on employee cost as well as on other expenses. So on the employee cost, we said that, you know, we should look at a full year basis, and on a full year basis, it should grow in the range of 10, 12%-13%. So this 12%-13% growth in employee cost, is it including ESOP that we are guiding, or we should look at it more from excluding ESOP? Yeah, yeah, it's all included. It's 12-15 range I gave, and you can assume all including, including. Okay. Because in last year we had an ESOP, higher ESOP base, and this year the ESOP cost is going to be lower. So the, you know, ex ESOP employee cost this year could be slightly higher, right? Yeah, that's why we are giving you a blended rate. Right. Right. And on the other expenses side, you know, we, we are saying that, we should grow other expenses in the range of, again, 12%-15%. You know, historically, our guidance has been that we should look at other expenses. You know, from pre-COVID till now, the growth rate was around 8%-10%, and that should be our growth rate on the other expenses side. So now we've, you know, changed it to 12%-15%. So any, you know, specific capacity building or gaps that we feel that needs to be, you know, filled in because of which we have upped this, guidance of other expense growth? Yeah, I think Navneet actually gave a very detailed answer earlier on the call, right? He explained the entire rationale of where the investments will go, the branch banking side, digital side, technology. I thought that was a very detailed answer Navneet gave. Probably, if you have the call again, you'll get to know. And also one more thing, if I may just add. If you look at even pre-COVID till now, our expense, other expenses have been growing at the range of nearly 12% year-over-year. So also the very fact, right, if you do a new fund offers, the market has expanded. Look at the size of the business that has kind of come up, the opportunity in store. So keeping all that in perspective, and I think, I'm sure you would appreciate the fact, right, if things are not looking as good, expense curtailment is something that we would obviously act upon. We have kind of exhibited that very well during COVID times and even in past. But if there is a growth that is visible, and we want... I think we always made this comment, I will never shy away from spending money when the business opportunity is something that we kind of find favorable. Absolutely. So the question was also from similar point of view, that, you know, we are being, you know, mindful of the fact that the expenses that we've been adding, they are more variable in nature other than being, you know, very sticky in nature. Because we all are, you know, aware of the markets and the levels that we are at. So, you know, the nature of the expenses are more on variable rather than being fixed or sticky in nature. No, sir, actually, on a lighter note, we aren't aware about where markets are going. So I think we would have exactly stated the same thing 12 months back. And if somebody would have lost out on the following 12 months, it was one of the so-called good times of Indian market. So one needs to be very, very cautious when you tread that territory, right? In fact, I'm sure you appreciate the fact, right, and I think Navneet did touch upon this point. We now manage upwards of INR 700,000 crore. We have, like, 250-plus branches. We now have an alternative business that is getting set up. All of this is getting done for, like, sub INR 200 crore of quarter. 1,600 people. Yeah. So I think, we are definitely very, very mindful, and I think as an organization, we have been fairly tight-fisted when it comes to spending money. So nothing changes there for sure. But, for example, if we feel that by hiring the right set of people in analyzing our data, that would help us immensely over a period of time in terms of doing business, I think that's a call we would like to take positively. Our last NFO has made our product journey, and it has made our product journey to 100. To put that number in perspective, in March of 2021, exactly three years back, our total number of products we had on offer was 43. We have added 57 products in last three years to complete our, like, product bouquet to meet, you know, investors' needs of all kinds or, or needs of distributors of all kinds on active as well as on, on passive side. And of course, all the tech capability, the digital capability, the client services. Somebody asked about moving from client service to client delight. The new channels that have opened up, or the opportunities that have come our way, be the HDFC Bank or, or some of the other opportunities. Of course, the initial days, but we are investing in building the non-mutual fund business as well, and of course, on the international side. Right. Sure, sure. Thank you. That's all from my side. Thank you. Thank you. Thanks. Next question is from the line of Jayant Kharote from Jefferies India. Please go ahead. Hello, am I audible? Yes. Yes, sir, you are. Please go ahead. Thank you. Thank you for the opportunity. So two questions. First, on the WealthTechs, can you just tell us what is the share of these wealth techs apps in your SIP count and SIP flows? And also, how do they- You are talking about Fintech? Yeah, yeah, Fintechs. Uh, well, Yeah, got it. You scared us here by saying wealth tech. So I was... But, yeah. Yes, sir. So and also our wallet share and market share, I mean, how is it in contrast to our overall market share, and how is it progressing in these apps? We don't give specific channel-wise market shares as such, but yeah, we can just definitely comment. It's fairly healthy. Okay. And sir, and the total share of these apps on your SIP flows or any indication how big have they become for you? So the more than half of the new SIPs in the industry come through Fintech channels. Larger proportion of that come from B30 towns. And on the incremental SIPs that come, we have a healthy share. They are more prominent in the new SIPs rather than on the lump sum side. And our share over the last three years has been inching up. So it was lower on the lower side three years back, and almost every year it's been inching up. Great. Sir, secondly, on the alts business, if you could help us understand now you've hired, you've invested in that business. What are your timelines and expectations, and what would be the sort of early harvest or early launches that you see over there? Any clarity on your aspirations over there? So of course, as of now, I mean, the biggest priority for us, the way the management bandwidth gets spent, is like continue to build our mutual fund business. As you are aware, the kind of growth that we have seen over the last couple of years, and in fact, particularly on the SIP side, so we put all our energy on that side. But at the same time, we are cognizant of the fact that over a period of time, this is another important opportunity for us, and we don't want to miss out on that. So we launched our fund of fund investing into VC and PE fund that is around INR 1,000 crore in commitments. And then I'm very happy to see this progress over the last two and a half years on this side. We have already started investing and have seen participation from 4-5 institutional clients and little over 400 other individual clients, so definitely encouraging. The way the whole portfolio construction on one side and the client engagement on the other side has been evolving, that makes us feel very happy about it. This is also helping us in terms of going up the learning curve on the overall alternative business. The second on our private credit team, which has joined us in last few months, so a product here over the next couple of quarters you would see. So we are laying foundation stones for our alternative business, and you will keep hearing from us on this front. On the PMS side, the business is building up slowly and steadily. There's a lot more that we need to do. There, there is potential on, on that side as well, and we are cognizant of that. On the international side, regarding our GIFT City subsidiary, we have received all the necessary approvals for the launch of funds, and have started onboarding clients and distributors. Yeah, so in alternatives and international, this is our, our, another focus area apart from mutual fund, where we want to see further growth. How much are you targeting from the GIFT City this year? No, I mean, early days, the whole thing is evolving. We are very confident that over a period of time, with all the efforts that policymakers have been putting in and the structure that we have got, and, and the setup that we have put in place, this will have a good opportunity over a period of time. Thank you. Difficult for me to share the time here. No, no, that's okay. That's okay. Thank you, and congratulations on a great set-up now. Thank you so much. Thank you. Next question is from the line of Rahul Aggarwal, individual investor. Please go ahead. Hello? Yeah. Go ahead, sir. Congratulations on a good set of numbers. My question pertains to the investment growth, which declined on a sequential basis by INR 500-600 crore. So what is the further plan of deployment of this amount? No, sir, that has happened because we have paid out dividends. Okay. In July, we paid out dividend of almost INR 1,500 crore. So that is the fall you'll see in the balance sheet. You're saying what is the deployment, Sir, deployment remains, the deployment, schedule is already actually attached as part of the shareholder presentation. Sir, at the end, you will see the breakup of the investments made. That's available in your sheet. My question is like, such a big amount- Sure. is standing on, on the balance sheet, so which is yielding us around 7%-8%. Right. So, like, for that only, just 10%, which is in equity, that is in the part of the regulatory requirement. Right. So I need to just want to know that the remaining INR 500-600 odd crores, INR 6,000 odd crores, so do we have any further CapEx plan, or do we have any plan for giving out dividend or buyback? So, sir, for this year, the dividend payout ratio for March 2024 was increased to 77%, which was 72%, last year. Also, we have to adhere to the skin in the game, which is a SEBI formula. So capital that is invested in our scheme, and that's something which we cannot touch, and that's the mark-to-market gain, which is, that should be reinvested. The treasury surplus is invested in largely debt mutual funds. We are obviously seeding our alternate platform. We have mentioned in the past that, in our alternatives, own, alternate FOF, we have committed significant capital from the balance sheet. That will get committed and deployed over a period of time. And we always keep evaluating any and all M&A opportunities that come through to us. Given our size in the market, we get to see every transaction. We have not done a deal over a period of time just because it is a function of valuation and whether it's an appropriate fit for us, but we do keep exploring all options on the strategic front as well. All right. All right, thank you. All the best for the future. Thank you. Next question is from the line of Dipanjan Ghosh from Citi. Please go ahead. Hi, am I audible this time, sir? Yes, you are. Yes, you are audible. Yeah. So just two questions, sir. Just wanted to get some sense of the distribution mix for that particular NFO, and was it materially different from your equity-oriented distribution mix on the back book? And second, you know, your MFD mix in your equity-oriented business for Asia Pacific are on a declining trend. So just wanted to get some understanding of whether it is the factor of other channels growing very fast, or you are seeing some amount of, maybe channel share pressure. So in terms of the top 100, MFDs or top 1,000, you know, the data that you track, if you can give some qualitative understanding on, that. I think, Dipanjan, one thing, I'll just take the second question, and Navneet will expand on the first one. See, if you look at what has happened is if you look at last twelve months, the direct has gone up from 22.7 to 25.6, right? That is two count. One is basically mark-to-market change, and direct is more favorable because of lower fees. And overall traction in direct is, has been higher. So if you look at that mix, it is not about we losing a share in a particular channel. It is about how the overall pie kind of shapes up because of the varied channels that does business for us. So if you look at national distributors, has been more or less flattish over the last twelve months. The banks have been, have ticked up marginally, and MFDs have gone down. So that would be the overall scheme of things. Nothing to do with losing a share in the MFD channel or anything on those counts. Does that help? Yes. Yes, sir. So if I can just, you know, extend that point. So, you know, let me ask you in a reverse way. You know, if you can, you know, break up of your direct mix in terms of... And I think Jayant also asked this. You know, direct would be a combination of both, maybe direct, money coming in from the wealth platforms, maybe some of, some of it through your own, website, and maybe some other through the fintech, partnerships. So, which channel would be probably growing the fastest or some color on those, parts, and- Maybe I'll also explain you one more thing. See, what tends to happen is, of late, over the last, year or two, we have also seen a lot of, integrations of some of the MFDs into national distributors, so on and so forth. So what happens is, the MFD goes to a particular size, and he gets acquired by a national distributor. Now, he moves from the MFD part of the. He might be under the MFD in June of 2023, but in June of 2024, his assets would move because of the integration into the national distributor channel, right? So those kind of adjustments have also been taking place over the last, whatever, 12 odd months. Now, as yet, we have not got into dissection of the direct assets into RIA, into Fintech and the direct, direct as it is known. So we haven't really gone to that level of disclosures. Got it, sir. And on the first question, on your NFO, you know, origination, like, if you can shed some color? Yeah, sure. I think- Directionally would be similar. I think we have seen very good participation from all sets of distributors, be it banks, be it MFDs, be it all national distributors, be it Fintech, and of course HDFC Bank as a distributor, and investors who came directly. So there was very good participation from all distributors. Yeah. But still there will be some difference between the book and the incremental, because there are some people who participate in NFO as distributors, some people who focus more on the existing funds. So some bit of difference, but otherwise directionally that would be my idea. Got it. Thank you, Naozad. Historically, always NFOs and even in this one, NFO, it is more distribution-led rather than direct-led. Than the direct-led, so direct investors come later. Got it. Got it. Thank you so much, and wish you all the best. Thanks. Thank you, Pankaj. Thank you. Next question is from the line of Mohit from Centrum Broking. Please go ahead. Yeah, hi, am I audible? Yeah. Yeah, yeah, thanks for the opportunity. So basically, I was looking at the unique investors. So unique investors, I think the industry added around 2.3 million, and I think we have kind of, you know, 50% market share, whereas, you know, overall, we have around 22%. So, so which distribution channel was, you know, I mean, kind of, responsible for this, kind of an addition? I mean, could just throw some color on that? So all, we are seeing in terms of the incremental client acquisition in all channels, our flow share is higher than our top share, in terms of client acquisition. So, also, see, this is not necessarily a market share in sense. The same investor might have invested, so this is a penetration. In sense that the same investor possibly would have invested in three funds, right? For the first time he has invested in us, for us, he's a new customer. Right. Yeah, no, I, I understand, but I mean, I just wanted to know, I mean, which distribution channel, whether it's HDFC Bank or MFDs, you know, kind of, I mean, if you have some kind of a data on that. All, in absolute numbers, Fintech would be very high, but otherwise, all channels. Yeah. Otherwise, all fine. Fine. My second question is with the debt, you know, I mean, we have seen, in the industry data that, you know, we have got inflows after three quarters of outflows in the debt segment. So, any particular strategy, you know, we are, I mean, kind of taking, so that we could, you know, further increase our debt portfolio as well? So, I think it's a mix, some part of flows at the shorter end, and we have seen some flows from the individual investors at the longer end, who think that interest rates have almost peaked, and there is a possibility over a period of time rates go down, and they want to lock in these rates through duration products. But from an amount perspective, a larger proportion is at the shorter end. Oh, got it. And thanks for the information. Products like money market, ultra short, low duration, et cetera. Got it. Got it. That, that was helpful. Thank you. Next question is from the line of Gaurav Jani from Prabhudas Lilladher. Please go ahead. Yeah, thank you, and congratulations. First question to Naozad. Naozad, if I, you know, stripping off the soft costs, right? Last quarter versus this quarter, there's been an INR 18 crore increase in the, stock costs. So, you know, would you have to call out as to how much of this is sort of, you know, one time in nature, and, and you know, what's, what's the normal run rate it will be? So there is, it I wouldn't call it one time. Some of the employee engagement events we do, sometimes they spill from one quarter to the other. Something we may have happened in Q2 last year, happened in Q1 this year. So in that sense, it's not a one-off, it's just a inter quarter issue, right? That's why I would encourage you to see on an annual basis, and it will just even out over that period. Yeah. Understood. The second question is, you know, from a, you know, more structural perspective, right? So if I have to look at actually the kind of growth we saw in FY 2024, I think, overall equity, and this is why our NIM is sort of shrunk by about 2.5 basis points. Obviously, an outcome of, you know, decline in equity yields. Now, all things being equal, right, assuming a similar sort of, let's assume that, you know, similar sort of equity growth comes through, technically the revenue growth should actually be better than, you know, the last time around that we saw, right? Considering that, there are telescopic pricing, a lot of the funds would have reached a certain threshold. So just want to understand that. Gaurav, if the AUM will go up, the yields will come down, no? The revenue, basically the SEBI telescopic pricing formula will take off. So overall yields will come down. Profits, you are right, profits will go up, but the basis points that you are referring to would, of course, come down. No, sure. So what I meant is, the pace at which they actually have been declining, that should actually reduce, right? So. Yeah, yeah. Obviously, so if you look at the absolute numbers being same as a percentage of a higher denominator, it will kind of come down. Yes, the steepness of the slope will go down. Yeah, correct. So I just want to understand that the kind of decline that we saw, assuming a similar kind of a growth, you know, same kind of decline may not happen in future, is what I meant. You are right, yes. Okay, perfect. Thanks. That's it. Thank you very much. As there are no further questions, I will now end the conference. Over to Sunit Manoj for closing comments. Thank you so much. Thank you very much.