Ladies and gentlemen, good day and welcome to the Q1 FY 2027 Earnings Conference Call of HDFC Asset Management Company Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. 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. Hi. Thanks. Good evening, everyone. We'll begin with an overview of the mutual fund industry. Quarterly average AUM stood at INR 83.1 trillion for the quarter ending June 2026, up 15% YoY. Equity-oriented AUM crossed INR 47 trillion, up 16%. This 16% growth is during the year when there were bouts of challenges due to external factors and the impacts of same on local economy and markets. On flows during the quarter, equity-oriented funds saw net inflows of INR 1,272 billion as compared to INR 911 billion in the same quarter last year, increase of 40%. Liquid funds added INR 984 billion, though debt funds lost INR 757 billion. The others category, which includes ETFs, arbitrage, and fund of funds investing overseas, added INR 555 billion. SIP contributions stood at INR 318 billion in June 2026 versus INR 273 billion in June 2025, a 17% YoY growth. This, in our opinion, would have beaten the most optimistic estimates in June 2025. The number of folios has grown to 279 million from 241 million a year earlier. The industry added close to 6.6 million new unique investors over the last 12 months, taking the total mutual fund investor base to 61.9 million as of June 2026, compared to 55.3 million a year ago. We move to us. Our QAUM stood at INR 9.35 trillion, up 13% YoY, with a market share of 11.2%. Excluding ETFs, our market share stood at 12.4%. Our actively managed equity-oriented QAUM grew 16% year-on-year to INR 5.74 trillion. Our equity orientation continues to be meaningfully higher than the industry. Equity-oriented assets accounted for 65.7% of our QAUM versus 56.6% for the industry. On the fixed income side, net QAUM stood at INR 1.66 trillion with a market share of 12.9% and liquid QAUM at INR 851 billion with a 10.7% market share. On unique investors, we added roughly 0.46 million during the quarter when the industry added 0.53 million, taking our base to 17.1 million. Our penetration in the mutual fund industry now stands at 28%, up from 25% a year ago, which means 28 of the 100 mutual fund investors have invested with HDFC AMC. Systematic transactions, which is SIP plus STP, stood at INR 48.1 billion in June 2026 compared to INR 40.1 billion in June 2025, a YoY growth of 20%. Beyond mutual funds, we continue to take further steps to build our alternatives platform. We'll close our private credit fund this quarter and have recently got an approval to launch a second fund on venture capital/private equity side. A marquee global investor has proposed to seed this new fund with a commitment of $50 million. Total alternatives AUM, which includes AIF commitments, portfolio management services business, and advisory mandates, stood at INR 148 billion, up from INR 60 billion a year ago. Now to our financials. Our revenue from operations grew by 14% year-on-year to INR 11 billion, other income at INR 2.6 billion. Total cost for the quarter was INR 2.7 billion as against INR 2.1 billion in Q1 of last year. Operating profit for the quarter grew by 10% year-on-year with an operating margin of 35 basis points of AUM. Profit after tax stood at INR 8.4 billion, a growth of 12% year-on-year. Thank you so much. Navneet, Naozad, and I are here for any questions. We can start now kind of queuing up questions. Thank you once again. Thank you very much. We'll now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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'll wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. First question is from the line of Piyush Kumar from Magnus Hathaway. Please go ahead. Am I audible? Yes. Sir, basically, I have only two questions. First is how are the SIP inflows in your schemes in this quarter, and how are the SIP inflows month-on-month? Do you see any trends or any sentimental changes in the investor psychology based on the numbers? Sir, I think the SIP inflows remain very healthy for the industry. Over the last six months or so, they have been about INR 30,000 crore. We have a healthy share within that. What we disclose is inclusive of the systematic transfer plan. We disclose systematic transactions, which include both SIP and STP, and which have seen healthy growth over the last several months and despite the market volatility. Okay, sir. Sir, my next question is regarding which sectors are you most bullish on. Do you have any idea which sectors are going to perform going forward? Where the HDFC Mutual Fund is set to. Sir, we disclose 100% of our portfolios. If you just go to our website it'll be easier since we have our overweight positions well mentioned there. Okay, sir. Thank you so much, sir. Thank you. All the best. Thank you very much. Thank you. Next question is from the line of Devesh Agarwal from IIFL Capital. Please go ahead. Good evening, sir. Congratulations on good set of numbers. Sir, my first question is on the debt AUM. We have seen a 6% QOQ decline, and even the closing AUM is lower by 3%. What exactly has happened? Why are we seeing such a strong outflows in the debt schemes? Sir, thank you for the compliment, Devesh, on the debt side, we have seen money coming into the liquid fund, liquid and the overnight, while redemptions on the debt category. Last few months, the volatility in INR, the volatility in interest rates, given the global environment, crude oil prices, et cetera, we have seen investors redeeming from the debt funds. We have seen incremental inflows into the liquid fund for the industry as a whole, and we also have a decent share to get impacted by that. Both sides. Okay, sir. Second, sir, if you see on a blended basis, we have seen a marginal uptick in the yields for us. Is this purely because of the product mix or is there any other reason also? Has there been any impact of the new TER regulations which went live from 1st of April? As you know, there has been a change from the earlier PER methodology to BER. There has been an accounting change. Industry has been adjusting to the new environment. I wouldn't read too much into the movement in the first few months. Sure, sir. Sir, could you call out the revenues that we earn from the PMS and AIF segment? I think now it's increasing, at least in terms of overall growth. What would be the contribution? Can that be the reason for a sequential uptick in the revenue yields on a blended basis? Devesh, it's still very small. The PMS does have a large mandate, which is one of the government of India mandates. PMS and AIF. Sorry. Naozad, you want to go ahead? Sure. The alternative side, the economics are slightly better than the mutual fund business. The fee ranges between 80-90 points, depending on the product. PMS, the discretionary book is broadly in line with the equity margins. The non-discretionary piece is very different construct because it operates under very tight economics. Understood. Sir, last two bookkeeping questions. One is the asset-wise yield for the quarter. Second, just a clarification, if the CSR expense has been booked in the Q1 this year versus Q2 last year, is that right? Hi, Devesh. I'll take the question on the yield. Our total blended equity yield was 58 basis points. Debt was 28 basis points, and liquid is 13 basis points, 13. CSR expenditure is actually a function of how our CSR partners require the funding. This quarter, we have funded to the extent that was required. It is more than what we funded in Q4 of last year or Q1 of the previous year. Would you be able to call out what was the CSR expense? It's not like a big number either ways, Devesh, but it is a function of, as I said, the annual numbers are available for people what we spend. No, what I was trying to understand, we should assume a similar quarterly run rate for other overheads. It's not that there's any one-off element of the CSR in Q1. As I said, the CSR expenditure is not equally spread out through the year because it's a function of how our partners require the capital. This quarter, the number we have spent on CSR is higher than what we'd spent for Q1 last year, as well as Q4 of last year. Understood. Perfect. Thank you so much, sir. Thank you. Next question is from the line of Meghna Luthra from InCred Equities. Please go ahead. Hi. Thank you for the opportunity. Sir, has there been any rationalization in equity schemes, the distribution commissioning during the quarter? I think, Meghna, the one thing that we have done is, of course, because of the change from this TER to BER, the rationalization happened starting 1st of April itself. Okay. Can we get which Is it the Balanced Advantage? Across all schemes. The five basis points that we were allowed to charge in lieu of exit load has now been taken off. Secondly, the whole accounting treatment change. Both of these things led us to revise the structures on the book itself starting 1st April 2026. Okay. That's very helpful. Can we expect our revenue yield to benefit from it in the going two to three as well? It has kind of a lag effect, right? Spread over two, three quarters. I mean, let me recap the changes. First was the removal of the five basis points of additional TER that AMCs were earlier permitted to charge in lieu of exit load. Right. The second, a shift from TER, which included levies to BER, that's the statutory levies. The third element is the rationalization of brokerage limits on the cash market transactions. Our approach has been to offset this through optimization of commission structures, along with prudent management of both direct and indirect costs. What I can say is we've been able to maintain our margins. Got it. Sir, one more question is on the market. Our market share in the flow data on equity schemes is higher than our outstanding AUM. Yet, in our active managed equity, our market share has dipped by 20 basis points sequentially. Sir, how do I link to it? Quarter-on-quarter movement you see here is largely attributed to MTM movements because the market share is a function of two things. One is the MTM movement and two is the flows. I think overall, if you see, the MTM movement has resulted in the decline in the market share that you're seeing. On a year-on-year basis, the equity market share has held steady at around 12.8. Yes. Yeah. Got it. Lastly, sir, on the employee cost also, is the entire increase attributable to bonuses and increments? What would be the ESOP component of it? We have disclosed the ESOP component separately by means of a note. Okay. If you exclude that, which is there in the presentation. Thank you The increase in Q1 is largely on account of year-end increments that we have rolled out. Also, certain employee benefits get actually valued beginning of the year and sort of based on the market itself. There's an element of that involved on the employees front as well. We disclose the non-cash component of the ESOP separately in the way of a note. Got it. That's helpful. Thank you. Thank you. Next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead. Hi. Just wanted to understand from you on the ground realities as to what's really transpiring on the ground with respect to SIP momentum, direct versus distributed. Are we chasing any momentum change towards more distributed rather than direct? Any color, because we've seen SIP kind of plateauing. I know, Navneet, you've always been saying that this INR 30,000 crore number itself is a very good number. As analysts, we always look at even small drops as something which is a slight negative. Just trying to see as to what's really kind of happening on the ground. Secondly, even on the debt and liquid front, we've seen loss of market share. What are we trying to do to kind of arrest that or improve that? Those were my two questions. Thanks. Sure. First on the question on the SIP. If you look at the industry, June 2026 number was INR 318 billion, INR 31,800 crore. If you compare with June 2026, this was like INR 27,300 crore. It is a 17% YoY growth in a year which has been quite volatile. We have seen series of global events which have impacted the market. In last 10 years, I'm sure you said that there is a marginal dip even on a month-on-month basis. Look at the last 10 years trajectory. We have moved from INR 3,000 crore per month to INR 30,000 crore per month. During this period, we have seen so many market cycles, rate cycles, geopolitical shocks. There have been sharp corrections in market. There have been phases of muted returns. Through all of this, monthly SIP contributions have sustained and moved higher. I've quoted this many times that this is like India's 401 movement and investor behavior is very different than what I've seen as a fund manager or as a CIO for a long time, where retail flows would ebb and flow with market sentiment. There used to be a time when typical question from a distributor or investor would be, "Should we invest now or should we wait?" After a year or two, it would be, "Should we book profit now or should we wait?" It's very different. I think it's becoming a habit, and habits once formed, you would appreciate they tend to persist. I think our view has been, and it's been very consistent, that penetration related to formal savings base is still low, which means the runway from here is very long. Another factor which I'm sure people know but not giving enough credit is the role of investor education and the AMFI's initiative and the efforts of individual AMCs like ours. Look at some of the investor education initiatives we have taken to really spread the message far and wide to every strata of society, across to every nook and corner of the country. The message has been very consistent, that if you ride out the short-term volatility and stay invested through cycles, long-term outcome would be very rewarding. Having said all of this, I think we remain watchful of how investor behavior evolves in a more extended market downturn. If the downturn persists for several quarters or years, because that is one scenario this cohort of investor has not really been through yet. Jury on that is still out. My sense is that a large part of these flows are very structural. Got that. Any color into- Liquid. Yeah. On the debt side, last two consecutive quarters, we have seen significant outflows. I mentioned earlier, maybe it's the volatility in interest rates. I think what's been happening on the crude oil, geopolitics, currency and all of that. We have seen very decent flows in the liquid fund in this quarter. I think that as an industry, we need to work a lot more. How do we make debt funds more attractive to retail investors? Earlier, industry was more institutional, less retail. I am talking about, let's say, a decade back. It used to be more institutional, less retail. It was more fixed income, less equity. It used to be more lump sum flows, less of SIP. It used to be metros, less of other cities and B30. There are structural changes, dynamics. In this entire period, the one thing, somewhere it seems that we need to do a lot more work is how do we make debt funds more attractive for investors? There are several cohorts. Look at the retirees. You look at several people who just want a regular income or more protection of capital. How do we make our products more attractive? Recent categorization of paper by the SEBI, circular by the SEBI, has given us newer opportunities on life cycle funds, et cetera. In the industry, we are all working hard. How do we position that to our investors? Thanks. Just last question. What are the product launches? If I can add one more thing, that in last couple of years, we have seen investors participating in debt through hybrid funds, asset allocation products. The popularity of Multi-Asset Fund, Balanced Advantage Fund, Equity Savings, all of these categories are the ones through which the investors are participating in fixed income. What is the lineup product launches across mutual funds, SIF, PMS, AIF? Sir, over the last couple of years, we have significantly expanded our product bouquet on active funds, on passive side, both index and ETFs, both market cap-based indices and smart beta products. We have launched a couple of sector and thematic funds. On the PMS side, we have hired a senior resource and have launched product on that in PMS. In the process of raising money in a category 3 product. We have got the approval. We have mentioned earlier about our private equity venture capital fund of funds. On the SIF side, we have hired a senior resource for our SIF efforts. In fact, today only our board has approved our first SIF offering, which will be a SIF equity ex-top 100 long-short fund, which will be launched in the near term. This is just the start. Our aim is to build a full suite of SIF products over time. The whole idea is that our aspiration is to be consistently be the trusted investment partner for every investor across life stages, across income levels, across investment sophistication. Be it actively managed fund, passively managed fund, SIF, PMS, private equity, private credit, we would be present across all segments on a full-scale platform. Great. Thank you so much. Thank you. Thank you. Next question is from the line of Swarnabha Mukherjee from 360 ONE. Please go ahead. Hi, sir. Thank you for the opportunity. I had a couple of questions. One is in terms of the yield. The yield increase, and apologies if I'm repeating because I have joined a little bit late. The yield increasing, I just wanted to understand from your side that whether the increase is more an outcome of shift from TER to BER or also there is some component of the five basis point pass on there. Anything you can give some color on? And whether we should consider this to be the baseline number now and then think about the gradually dilution that we see with increasing AUM playing out from this level. If you could give some color on that and in terms of how we broadly expect the yields to kind of come up going forward, if there any color you can give that would be helpful. That is the first question. Second is, in terms of the SIP number. What I understand is that our trends have been fairly in line with the industry, how the numbers have moved over the quarter. As we move ahead in June, I think I just wanted to understand the trends that you are seeing in terms of SIP and overall net flows, how it is succeeding and do we have any leads in place to basically increase our market share in terms of SIP flows, if you could give some color on that. These will be my questions. Thank you, sir. The first I mentioned earlier that we have moved to a new regime. Earlier it was PER, which included levies to BER, which is BER plus statutory levies. Our approach has been that the changes, how do we offset through the impact, whatever it is, through optimization of commission structure on the one side and prudent management of cost, both direct as well as indirect costs. All I would say is that we've been able to maintain our margins. There has been, as I said, accounting change and a new structure. Wouldn't really read out much in terms of quarter on quarter little bit of movement. Our endeavor has always been to ensure that distribution partners are fairly compensated for the efforts that they put. I mean, we believe in our long-term partnerships. At the same time, ensuring that we maintain decent margins. The second question on the SIP growth. I mean, you have seen over the last several quarters, the growth in the systematic book versus the industry, while the industry itself has seen a healthy growth and within that, we've been able to gain market share. One of the biggest focus for the fund was not only in last few years where SIP flows for the industry has grown, but for the longest period, we would have been one of the earliest players in the asset management industry to talk about the benefits of long-term investing, to promote the concept of SIPs much earlier than many others, reaping the benefit of that and trying our best to optimize through every single channel. Right, sir. Got it. Helpful, sir. Thank you so much. Thank you. Next question is from Ankit Bihani from Nomura. Please go ahead. Yeah. Good evening, team. I have two questions. Given that India currently remains an underpenetrated MF market and AMCs have so far been able to defend their margins through distributor negotiation. Do you think this pricing power with distributors is sustainable over the medium term? Let's say we enter into a scenario wherein the markets do not deliver significant returns over a medium term. Does the economics change? This is my first question. My second question is, how do you see the opportunity in the alternatives evolving in India over the next five to 10 years? What role does HDFC AMC aspire to play in this market? Yeah, those are my two questions. Sure. First question on, see, the economics between asset manager and the distributor doesn't change depending on the market. I mean, as you said, if the market is muted, then whether there is a shift in the pricing power between the manufacturer and the distributor, not necessarily. As I mentioned earlier, for us, we look at it as a partnership. They bring in investors, they manage the investors, they do the handholding through ups and downs of the market. At our end, we deliver returns in line with the expectation. It's a healthy relationship evolved over decades, and we ensure that it is a win-win for investor, distributor or advisor and us. Your second question on the opportunity in alternatives. As I said, these are very early days of financialization of savings in India. I think all the factors, be it formalization of the economy, digitalization of the economy, digitalization of finance, financialization of savings, and one important aspect, financialization of assets, which you are seeing the growth of REITs, growth of InvITs, growth the way we have seen even on the commodity side, the way gold and silver funds grew. I think there are tremendous opportunities in the asset management. One healthy and good encouraging trend has been picking up of the SIP habits. I've quoted this several times that we are transforming from a nation of saver to a nation of investors. There is a large savings pool and over a period of time, it's going to get more and more into the investment form. There would be opportunities similarly on the alternative side. There is a la rge investable listed universe, but there are large number of companies in the unlisted space, which over a period of time will grow and get ready for listing. Before that, there are opportunities to participate in that growth through private equity or venture capital. Private credit market is hugely under-penetrated, very early days. Over a period of time, there are tremendous opportunities for flexible and the private credit funding for large number of corporates in India across, whether it's mid-market or large corporates for a variety of structures. Similarly, on the segregated accounts, be it the global investors, be it institutions, family offices who are looking at more sophisticated bespoke solutions. As a house, we are building capabilities across the board. See, what is our biggest strength as a house? Over decades, we have demonstrated great capability on the investment management, on risk management, and on product management. The whole idea is that without getting into the specifics about whether it's on the mutual fund platform or alternative platform, whether it's active or passive, whether it's large institution or retail, whether T30 or B30. A lot of time the industry discussions are institutional, retail, distributed versus direct, but at HDFC AMC, the core capability is investment management, risk management, and product management. We want to be like one-stop solution for all kinds of investors and building capability. We've built a large team. We have got now 40+ investment professionals on the mutual fund side. It's not about the headcount, it's about the experience. Most of our fund managers have experience of 20 years- 25 years plus. Even all our analysts have seen multiple cycles. They are highly experienced. We have now got six people on the private equity VC side, investment team. Six on private credit side, eight on PMS across both debt and equity. We are building lot of capability on the investment business side. Similarly, on the risk management and as I said, product management. I've hired investment specialists, which we already had for mutual fund, but now we have investment specialist on the client side, the interaction, whether it's on alternative side, on the PMS side. I talked about couple of products that we have been looking at. I see tremendous growth across all segments in India, and we want to participate in those opportunities. Okay. Thank you for answering my question. Just one last question. If I look at the gold ETF or silver ETF, one of our competitors is able to charge three and a half to four times the TER what other players are able to charge. I suppose that has got to do with the liquidity they are able to provide or the impact cost would be lower in them. How do we expect to narrow this gap? Because this looks like a very distinct advantage that one AMC is able to have over so many other players. It's not three or four times. Our industry is highly competitive. I'm sure be it investors or be it distributors, I think they all compare each other. Of course, a lot of pricing is capped by the regulation. Within that, wherever there is competition in some of the fixed income funds or the ETFs, et cetera, I think we all do the right benchmarking and always try to optimize our margins everywhere. Okay. Thank you for answering my question. Thank you. Next question is from the line of Mohit Mangal from Centrum Broking. Please go ahead. Yeah. Good evening, everyone, and thanks for the opportunity. Sir, my first question is basically looking at your distribution network. I was looking at the bank share. That has come down from 16% in Q1 2026 to 14.7%. Now, I know that you have said that FinTechs have grown faster than the banks. Do you think this trend will continue or banks will grow faster than the FinTechs? FinTechs, five years back, their numbers were negligible. Particularly, by building the SIP book, now they've become very significant. Now that if you look at the overall net flows, a large share is coming through the SIPs and which is where they have focused in last couple of years and have become very significant. Of course, the total is 200, so somebody's share will go down. Not that banks have not been growing. In fact, a couple of them have been growing decently, participating in the growth. There is, let's say, another channel which has also grown significantly in last couple of years, which would impact the relative share of the other participants. All right. The banks' flow market share continues to be high in the book? Yeah. My second question is basically on strategy on growth. What we have seen over the last few quarters is that our market share have remained broadly stable, with some kind of a marginal decline as well. Whereas, in this competitive intensity, we have seen a few players growing. Also, do we have kind of an internal target to grow higher or any strategy towards that would be wonderful. Our endeavor is to ensure that we have a scale. We optimize our market share everywhere. At the same time, we try to grow the market as a leading player across asset classes, across products, across channels, across geographies, so on and so forth. Have that with the quality, and by quality, I mean a lot of focus on individual investors, a lot of focus on building the new markets like B30, et cetera. Trying to penetrate more among the existing investors, so on and so forth, and keep the industry-leading profitability and have a fair balance between the scale quality and profitability. Over a longer period, as I mentioned, the idea is to be a best-in-class platform. We have always been and continue to strengthen that platform. I talked about the people strength. We have the processes. We have one of the longest track record in terms of the proper qualified track record of actively managed fund and got large bouquet of passive funds, the work that we are doing on PMS and alternatives, and continue to grow all of this with a very tight control on the cost. That is what we have always done and aspire to do that continually. Right. No, this is helpful. My last question is on the employees. Basically, I'm looking at their employee count- Mohit, sorry to interrupt, your audio's not clear. Can you please speak through the handset? Is this better now? Yes, thank you. Yeah. Basically, on the employee count, I was looking at your employee count, it has increased by around 92 over the last one year, while our number of branches are kind of remain stable at around 280. Just wanted to know, will this kind of employee count increase further as well? No. A good part of that increase is, I told you about building some of these new platforms, hired people on the international business, on PMS alternatives, even on our domestic mutual fund side. Of course, on the institutional sales, in our digital AI marketing, across functions. As I said that we won't shy away from investing in the business and one of the biggest investment that we make is people, right? Hiring the best possible talent and ensuring that we provide them the best possible environment to make the most of the opportunity which is in front of us. Understood. Thanks, wish you all the best. Thank you. Thank you. Next question is from the line of Dipanjan Ghosh from Citibank. Please go ahead. Hi. Good evening, everyone. First, few questions from my side. If you look at your other expense data, that growth seems to be a little bit on the higher side. Just wanted to get some color on the granularity of that other expense. I understand your cost ratios are quite top-notch, but still, just from a quarter perspective, if there's any one-off or anything out there. Second, especially from a fintech channel perspective, we now have maybe three to five years of data for customer vintage. During this market volatility that has been there intermittently over the last almost 12-18 months, in terms of customer churn or customer wallet diversification across different schemes or products versus the traditional channels, what has HDFC AMC observed on some of those fronts? If you can give some color on that. Finally, I joined the call a little late. I don't know if you mentioned the product-wise yield on the mutual fund side of the business for the quarter. Hey, hi, Dipanjan. It's Sanjay. I'll take the first and the third. We covered the question on operating costs as well. If you see the increase in operating expenses quarter-on-quarter, that's from March quarter to the June quarter, this is largely driven by CSR expenditure. To explain the year-on-year increase, it's a function of what we spent on CSR as well as certain IT and IT tech spend. There is no one-off in the sense, as I explained in the call earlier, the CSR expenditure is linked to when our partners require the money, so it is not evenly spread through there is all I would say on that. There's no one-off there. On the yields, we did mention the yields earlier, I will repeat them for your benefit. Equity was 58 basis points, debt is 28 basis points, and liquid is 13 basis points and active equity was about 61 basis points. Your other question was on. Fintech behavior. there's a lot of incremental retail participation is coming from Fintechs, especially the younger and first-time investors. The way people discover, evaluate, and invest in mutual funds is changing, and Fintech platforms are at the center of that shift. I was just seeing Fintechs have registered 8.6 million SIPs in this quarter. To put this number in context, if I remember correctly, in FY 1920 Total number of SIPs they would have registered would be close to 400,000. there has been a tremendous growth over the last four or five years in terms of bringing in incremental new investors, particularly through the SIPs. we made the decision early to treat these platforms as genuine partners, and that orientation is paying off. we are seeing good traction, both in terms of SIP registration and overall flows. Your question on the behavior of investors is, we have seen significant growth, in the number of investors. Good number of them are first-time investors. In another question pertaining to SIP flows and sustainability of that, I mentioned that, we have to maybe watch the behavior over the next several years, how some of these first-time investors behave. Effort from them as well as from the industry, from all the players is on doing the right kind of investor education and ensuring that investor behavior has more long-term orientation. Got it. Just one small follow-up, Naozad. If I understood correctly, you mentioned equity, including index, was around 58 for the quarter. I think last quarter was around 56. Firstly, are these data points correct? Secondly, if it's correct, then is the increase quarter-on-quarter driven largely by mix change or is there something else in that? I think this question has been answered twice by Navneet already. I mentioned earlier that we have moved to a new regime. I've explained that before. Don't read too much from one quarter to another, yeah. Got it. Thanks, Naozad, Navneet, and the team and all of us. Thank you. Thank you. Thank you. Next question is from the line of Piran Engineer from CLSA India. Please go ahead. Yeah. Hi, team. Congrats on the quarter. Just wanted to clarify on one statement that you made, sir. What is the contribution of fintechs to SIPs? Did I hear 8.6 million? Yeah, the new SIP registrations. Yeah. 8.6 million in just a quarter? I don't think from that- It sounds too high. That's why I'm asking. No, last couple of years it's been like an exponential growth. No, no, fair. There are like 100 million SIPs today outstanding. In one quarter, one channel No, it could be like the same person moving from one fund to another fund. I'm talking about like the gross number. Yeah. Okay. Yeah. Just broadly, how big would fintechs be for you as a channel? I think we put that there because the direct number that is shown includes three things. One is that if somebody has come through fintech in the direct plan, because fintechs are also, some of them are in regular plans, some of them bring money in direct plan. It includes somebody coming on our digital assets, be it an app or a portal or walk in a branch. Third is through the RIAs. I don't know whether we give further breakup because industry already is like so much of data is in public domain. Fair. We have a healthy market share. That's what we have. Yeah, we have healthy market share that I mentioned, yeah. Understood. Yeah. Do you notice any difference in the behavior of investors who come directly versus through distributors? By behavior, I mean, be it the type of investment, the amount of churn that they do, or the average ticket size, et cetera. AMFI has published a handbook and there, if I remember correctly, the data has revealed that investors who had come through our distributors have a more longer-term. This trend of a lot of investors coming into the direct plan through the fintech channels has been a more recent trend. As I mentioned earlier, that we'll have to see the behavior over a longer period of time to arrive at any conclusion. Understood. Just lastly, in your conversations with both distributors and investors, why do you think flows into mid caps and small caps are still dominating despite valuations, whereas large caps have totally dried up? I would just like to hear your thoughts. Anything like the way we look at our industry. One is an institutional response and one is a market response. Institutional responses are fund managers, are investment specialists. All of us would give views on the market, would give views on the way we have positioned our funds, the views on valuation and what investors should be doing. The second is a market response, what investors do across cycles, across different phases of the market. I think over a long period of time, we have seen outperformance of mid-cap funds and small-cap funds. Off late, that has become more pronounced. Maybe our investors who have lesser allocation have been participating. The second thing, I think I mentioned earlier that if you see the net flows and see the SIP flows, a very large part of the flows, almost 75%-plus of net flows would be on account of the SIP flows. There is a large SIP book in these segments. Automatically, you will see that in the overall net flows. As the SIP book is more longer term, I'm saying. Got it. Yeah. Okay. That's it from my end. Thanks, and wish you all the best. Thank you. Thank you. Next question is from the line of Shreyas Pimple from Nomura. Please go ahead. Hi. Thank you so much for the opportunity. I wanted to understand if the ESOP expense has been accelerated in this quarter. We have taken around INR 23 crore of ESOP expense versus earlier guided INR 67 crore for the entire year of FY 2027. I'll take that. That's largely because we granted a bunch of stock options under the new plan in the last week of June of last year. The last year number is for nine months, largely the amortization. If you look on a quarter-over-quarter basis or year on previous quarter to this quarter, the number is the same. Right. There is no change in the INR 67 crore for the entire year FY 2027, right? No. Last year was for a nine-month period, maybe for the benefit, and we typically do that. I will actually spell out the non-cash expense that is expected for the next, based on the current ESOP that have been issued. For FY 2027, the total non-cash cost would be around INR 79 crore-INR 80 crore. For FY 2028, it'll be INR 63 crore. For FY 2029, INR 41 crore. For FY 2030, INR 11 crore. Okay. Thank you so much. That explains. Another thing on ESOP, on OpEx was that you had earlier guided that OpEx growth of 12%-13% ex of this non-cash charge. Do we still stand by that? You see, typically, I would encourage for you to look at costs on an annual basis rather than on quarterly trend. I think the way we would like to focus on this is that we try and keep a very close eye on our net operating margin as a basis points of AUM. We've typically operated in the 33-35 basis points range, and that's the objective for us to stay in that corridor. That's the way we look at the business on an overall basis. We have been running a very tight ship, and have always been, I think, very prudent when it comes to spending. Having said that, we will not shy away from investing in the future. I must say this, because in a growth business like ours and the opportunities that I outlined before, the real risk is under-investing, and we will not under-invest. Yeah. That's very clear. The second question was in terms of performance. The performance has drastically improved in the month of June. The one-year performance in equity versus previous three months of a little bit of subpar performance in equity. What has, in your view, accelerated this improvement in performance? Let us understand this better. I can spend all day showcasing how good our performance has been over time, we have one of the longest track record of performance across a large number of funds. We always tell our investment team whenever I interact, that it is not about the columns on the left side of performance sheet, which is generally the short tenure, but columns on the right side, three-year, five-year, 10-year, 20-year. That will create the wealth for the investors. Is there a way to improve numbers there by willing to overlook what happens in near term? We are all for it, and that is the way we have built our business over decades. We have always believed and said that we would like to build a track record of consistent performance. Consistency doesn't mean outperforming every single quarter. I've spent good part of my life as a fund manager and CIO, I've always maintained that in this business, periods of relative underperformance are an inevitable part of generating long-term outperformance. Having said that, I shouldn't sound defensive as if performance is not good. In fact, as I said that I can spend a full day showcasing you how good the performance has been. Weighted average AUM business continue to be in the top two quartiles over two years, three years. Even if you extend the lens to five years and beyond, we would be in several of the funds in first or second quartile. Let me pick up the sheet and our HDFC Balanced Advantage Fund is in Q1 over three, five, 10 years. It's a fund above INR 1 lakh crore. It has been a very popular fund among investors. Another large fund, HDFC Flexi Cap Fund, is in Q2 in one year, Q1 over two, three, five, 10 years. Another fund over INR 1 lakh crore is a third fund. A large fund is in Q2 in two year, three year, and Q1 in five and 10 year. Large Cap Fund, which actually has a lower market share than our overall equity market share. It is Q2 in one year, Q1 over five years, and I see opportunity for us to grow in that segment. Another category which has grown for us, Focused Fund, is in second quartile in two years. It's in Q1 over three, five, 10. In fact, one of our funds, which Anand is managing, who's been with us for 20 years, Value Fund. This fund is INR 7,000 crore or so in a category which would be close to INR 200,000 crore or so. I think second quartile in one year, three year, five year, 10 year. We have a lot of potential to grow there. I can go on, but all I would say is that investors and the distributors, the one who actually allocate capital, they don't judge the fund on one or two quarters. There are funds which are doing well on those quarters also, so I don't want to sound defensive, but investors look at performance over a meaningful time horizon. We remain committed. We have shown the performance track record over a very long period of time. Remain very confident about our investment team, about our processes, philosophy, risk management, and everything. Yeah, that- If I may look at the client addition that we had for several quarters, the folio addition that we had, and I'm sure they all appreciate the performance that we have delivered. A lot of that growth would be attributed to the performance that we have been delivering. Yeah, that is very helpful and clear. Sir, just last participant, you mentioned that the large part of the net inflow has been coming from SIPs. Can that be really compared because SIP is a gross number and there can be redemptions out of that as well? Our industry has made it clear that the SIP number which are disclosed by the MF, the amount is the money in the bank, and the number of investors who have credited that. MF is disclosing both number of investors who have put that money and the amount of money that has come. There's no meaning of gross or net when it comes to the SIP flows. People who have accumulated money by doing SIP over a longer period of time, if they redeem or switch that money to some other fund, that's a different thing, and we should not mix up those two numbers, SIP flows versus SIP redemption has happened on that count. Understood, sir. Yeah, that is very helpful. Thank you so much for answering my questions. Thank you. Thank you. Next question is from line of Raman KV from Sequent Investments. Please go ahead. Hello, sir. Can you hear me? Hello? Yes, we can. Hello? Raman, can you hear us? Yeah, I can hear you. Can you hear me? Hello? Yes, we can hear you, but a background noise from your end. Can you move to a different place, please? Actually, my connection is very bad. I will just make it quick. What percentage of the other income is MTM revenue, like mark-to-market gains? Other income largely is a function of the gains that we have on our balance sheets, the equity and the debt investment that we have. Almost most of it is mark-to-market because almost all of it is mark-to-market, other than some realized gains where we have sold something there. Understood. Thank you, sir. Thank you. Next question is from line of Smita Mohta from Mars Ventures. Please go ahead. Yeah. My query was, sir, that out of the unique investor folio, 17.1 million, how much was the new folios addition as a percentage YoY growth? From that, what is the percentage of AUM for? Second, commission which was- Smita, I'm sorry to interrupt you, we are losing your audio. Okay. I just wanted to ask that I hope you've got the first thing of my query, right? The first question. Second is your fees and commission is Hello? If you can repeat that. Yeah, the first question is that out of the unique investors, how many is added during this quarter? That is what percentage of folio has been added or growth YoY. Second of all, out of this folio, what is the growth in the AUM QOQ? Your fees and commission, which has risen 54%, is it going to continue every quarter because of this directive from the government? Last of all, out of the basket of products which you have, which is more margin accretive? As you said about the digital AI, so is that going to reduce your total cost in your business? How is it going to help you out? These are few of my questions. See, on the- Number of folios folios. Last one year, industry folios have grown by 15%, and our growth is 28%. Last three years, industry has grown by 23% CAGR. Our growth has been 37%. I can quote a number on unique investors also. Against the CAGR of 17%, we have grown by 34% and in last one year, industries are 12%, adding 6.6 million investors versus our growth of 25%, adding 3.4 million. Your second question was on the The only thing is we don't disclose the value of these additional new customers or anything. We give the total AUM growth only. I think the second question was Yeah. Fees and commission, sir. The fees and commission expenses that you see in the P&L is, first of all, it's a very small amount. That's largely the function of brokerage that is paid on PMS and alternatives. Will this continue Q on Q, this kind of expense? First of all, it is only INR 2 crores in absolute terms. Secondly, as the PMS and AIF business will increase, as the business goes up, the brokerage on that will be sort of continuously paid. The only thing, ma'am, is the brokerage is a subset of the fees we make. The fees we'll make will be substantially higher from that. Brokerage is paid out of the fees we make. Your digital AI will not reduce your cost in this entire cost? I think the way it works is the fees that we make on this, if we make fees of INR 100, that INR 100 gets added to the revenue. If we spend INR 20 out of that as commission, that 20 gets visible in the expenses on a separate line. The INR 2 crore is the expense. On that, we would have made substantially higher fees, which goes into revenue from operations. Was there any NFO in this particular quarter? This is not to do with NFO, ma'am. This is not a mutual fund business. This is for portfolio management services and alternative investment fund business. Okay, got it. Out of the basket of products which you have, which is more margin accretive to you, sir? Equity business for us makes maximum money. Second comes debt, and then comes liquid funds. That is the way our margins tend to be. More in equity will actually enhance our overall margin. Right. However, out of INR 88.7 million in equity, we have seen that your total investment basket is 11.8% only in equities. Major is in debt instruments, which has gone down. No, ma'am. That is our treasury book. The one you are referring to is our treasury book. Our fees are on the assets that we manage in mutual fund business. If you can actually go through our presentation, it actually lists down our AUM breakup, and it will give you how much percentage of our total business that we do, which is INR 9.3 lakh odd crores, how much of that is in equity, how much of that is in debt, and how much is in liquid. These three things generate fees for us. The INR 8,000 crores that you're referring to is our treasury surplus, which is in our balance sheet. On that, we are very cautious investing that capital. Hence, large part of that money is invested in debt. Got it. Do you think your margins would be stable and the AUM growth would be same as done in the yearly or quarterly basis going ahead? Just a guidance. We don't hazard a guess on our growth numbers at all, ma'am. Oh, thank you. Thank you very much. Thank you. Next question is from line of Anand Bhaskaran from AVA Capital. Please go ahead. Yeah. Good evening. Can you hear me? Yes, please. Yes. Yeah. This is one small question. Do you have any plans like, you know, of launching your own PMS product? Because so far, most funds have been like from other third parties. Any plans to launch your own PMS fund or AIF fund, which is managed on the house? No, of course. I mean, investment management is not outsourced. It's our own. I mean, we are a fund manager, and the strategy we offer to our investors, both discretionary as well as non-discretionary and advisory. Yeah, it's our own product. Okay. Can you just give me like the margins that you make from, let's say, PMS to mutual funds? What will be the main difference in terms of margins? I mentioned earlier that on the alternative side, margins would be slightly better than the mutual fund business. I mean, the mutual fund equity business, like to like comparison. Management fee would be between 80 to 90 basis points, but it'll depend on each product. PMS, the discretionary book would be in line with the margins that we earn on the equity side. The non-discretionary piece is quite different because the non-discretionary side gets a bit under like That runs on very tight economics. Those are some of the provident fund mandates, et cetera, which have a very tight economics. Otherwise, the discretionary book would be broadly in line with equity margin, and alternative side would be slightly better than mutual fund equity business. Okay. This is the last question. In terms of the entire mutual fund categories, in U.S., the most leading fund category is the index funds and ETFs in general. In India specifically, because now it is kind of a nascent market compared to, let's say, in America, what do you think is the, as a whole industry, as a perspective, what do you think India's growth format is in terms of what sort of categories of mutual funds will be the leading thing in India specifically? I think as a country, we are under-invested in equities. In Western world, we have seen capital moving from active to passive, and within that, in U.S., the taxation has played a role in making ETFs relatively even more popular. In our opinion, India will have a different story to tell. Beyond asset allocation, investors in India will allocate to both categories and further allocate to products within those respective categories. I see that happening on a daily basis. Okay. Lovely. Thank you so much. Thank you. Thank you. Next question is from line of Nikhil, Individual Investor. Please go ahead. Hi, sir. Thank you for taking the question. I wanted to check with you, now that buybacks have become relatively attractive, what are our plans in terms of weighing buybacks against dividends? That's my question. Thank you. I think our chairman answered that very eloquently in our annual general meeting. No, I think this request was made by a few. The board has heard the request of certain investors on the AGM as well. It's the prerogative of the board to decide what it does on buyback and dividend both. Thank you. Thank you. Thank you. That was the last question. I would now like to hand the conference over to Mr. Navneet Munot for closing comments. Sure. To sum up our closing AUM stood at INR 9.32 trillion. Actively managed equity-oriented AUM at INR 5.93 trillion. We have 28% penetration in the MF industry in terms of unique investors. Beyond mutual funds, our alternatives platform has scaled to INR 148 billion, and our international business out of Gift City continues to build steadily. We remain very constructive on the long-term opportunity. Financialization of savings in India is still in its early stages, and our focus remains on delivering consistent outcome and building capability for the long term. 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