Ladies and gentlemen, good day and welcome to Nippon Life India Asset Management Limited Q3 FY 2024 Earnings Conference Call hosted by ICICI Securities. As a reminder, all participants' 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 the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ansuman Deb from ICICI Securities. Thank you, and over to you, sir. Good morning, ladies and gentlemen. On behalf of ICICI Securities, we welcome you all to the Q3 FY 2024 results conference call of Nippon Life India Asset Management Limited. I now hand over the call to Mr. Sundeep Sikka, Executive Director and CEO, for his initial remarks, post which we will open the floor for Q&A. Over to you. Good morning and welcome to our Q3 FY 2024 Earnings Conference Call. We have with us Chief Business Officer Saugata Chatterjee, Interim CFO Amol Bilagi, Chief Distribution Officer Arpanarghya, Head of ETF Arun Sundaresan, Head of AIF Ashwin Dugal, Deputy Head of AIF Ashwin Dugal, and Muthishan Nominee of Nippon Life Japan. Our detailed investor presentation and press release have been uploaded on the exchanges as well as on our website. I would like to share some comments on the recent industry trends and our performance prior to addressing your questions. I would like to start by mentioning that in Q3 FY 2024, NAM India has achieved its highest-ever quarterly operating profit of INR 2.51 billion, as well as a profit after tax at INR 2.84 billion. Importantly, our equity net sales market share and fixed income market share remain well above our equity AUM market share. This is the result of consistent efforts on the part of the business team. At the same time, we continue to focus on diversification with a specific focus on fixed income, alternative, and offshore businesses. Beginning with the markets, equity markets in Q3 FY 2024 showed a robust performance. The Nifty moved up by 11% quarter-over-quarter, while Nifty mid-cap and small-cap moved 13% and 15%, respectively. RBI held the repo rate steady at 6.5%, while the 10-year G-Sec increased by 5 basis points quarter-over-quarter to 7.17%. Coming to the data of mutual fund industry, industry quarterly average AUM grew by 5% quarter-on-quarter in Q3 FY 2024 to INR 49.22. This reflects a year-on-year growth of 22%. Strong momentum in equity segments sustained as the share of equity in the overall AUM continued to increase, ending at 56% for Q3 FY 2024. Now moving to flows. The equity category, excluding index and arbitrage, witnessed a gross inflow of INR 1.61 trillion and a net inflow of INR 578 billion. Both gross and net were higher on quarter-on-quarter basis. Strong inflows were witnessed across all major categories led by small-cap, sector, and thematic categories. Investments via SIPs route further increased, with SIPs contribution for the quarter being INR 516 billion, up 29% year-on-year and 10% quarter-on-quarter. Monthly SIPs growth in December 2023 stood at INR 176 billion, which was an all-time high. SIP folios increased 7% quarter-on-quarter to 76.4 million. The fixed income category, that is both debt and liquid, witnessed net outflow of INR 291 billion. The majority of the outflow was in short-term duration funds. The ETF category had a net inflow of INR 71 billion. At the end of the quarter, unique investors in mutual fund industry increased to 42 million, while investor portfolio increased to 164 million. Now moving to our business performance. We closed the quarter with total assets under management of INR 4.81 trillion. This includes mutual funds, managed accounts, and AIFs. Our mutual funds quarterly average AUM grew 8% quarter-on-quarter and 29% year-on-year to reach INR 3.78 trillion. On a YTD basis, we have been the fastest-growing AMC amongst the top 10 players, with 29% growth over March 2023. Now I would like to share a few highlights for the quarter. Starting with the market share, our market share increased by 21 basis points quarter on quarter to 7.67, with market share increase across asset categories. This is the third successive quarter for market share increase that we have witnessed. Our equity market share also continues to improve. It increased from a low of 6.18- 6.67%, of which there was a 15 basis point improvement in Q3 FY 2024. The share of equity AUM in our overall AUM continued to increase and stood at 48.6% for Q3 FY 2024, up from 46.8% in Q2 FY 2024. Performance of most of our equity schemes remained strong, and this, along with our distribution network, digital capabilities, and strong risk management, helped us again deliver double-digit market share in net sales in equity plus hybrid segment in Q3 FY 2024. On the segmental fund, our individual AUM, which consists of retail and HNI, saw further market share improvement. Individual AUM grew 12% quarter-on-quarter to INR 2,352 billion. Market share increased by 25 basis points quarter-on-quarter to 7.66%. Our B30 AUM grew 10% quarter-on-quarter to INR 791 billion, which keeps us among the fastest-growing large AMCs in B30 locations. Our market share improved 13 basis points quarter-on-quarter to 8.71%. This segment forms 20% of our AUM versus 18% of the industry. We continue to have the largest base in the mutual fund industry with 15.5 million unique investors. We are humbled to have one in three mutual fund investors in India. I would like to touch upon some important aspects of our systematic book. I'm happy to share there has been a continued uptake in our systematic flows over the last 10 quarters, which has led to an increase in our market share. Of the incremental SIPS flow in the quarter, we had a market share of almost 18%. SIPS market share increased by roughly 260 basis points over March 2023- December 2023, ending at 8.7%. Our monthly systematic book rose by 21% to INR 21 billion for December 2023 over September 2023. This resulted in an annualized systematic book of INR 252 billion. On a YTD basis, monthly systematic book grew by 88% over March 2023, as it has 23% growth for the industry. The number of systematic transactions for the quarter increased 18% quarter-over-quarter to roughly 15.2 million. 63% of our SIPS AUM continued for over five years versus 27% for the industry. Briefly moving on to the ETF segment, it continued to be one of the largest ETF players with AUM of INR 929 billion and a market share of 15.4%, which increased by 134 basis points quarter-on-quarter. The gold and silver ETF remains the biggest funds in the category. Overall, passive AUM, which includes ETFs and index funds, crossed INR 1 trillion in the quarter. Our share in the industry ETF portfolio is 61%. We have 64% share of ETF volumes on NSE and BSE. Our ETFs average daily volumes across key funds remain far higher than the rest of the industry. Moving to our distribution franchise, our digital strategy is continuing to deliver better results with a clear emphasis on increasing reach and taking advantage of technological innovations to deliver a smooth user experience. The perpetual beta approach has enabled us to continuously strengthen our digital ecosystem and provide an easy and straightforward investment experience to our investors and partners. Digital transactions rose to 4.25 million in nine months, up 76% year-on-year. We have witnessed close to a 14% increase in Q3 FY 2024 compared to Q2 FY 2024. The digital channel also contributed to 58% of the total new purchase transactions for nine months FY 2024. Our physical distribution base is well diversified, with presence in 260 locations across the country. We have over 98,000 distributors in total and added 2,400 distributors during the quarter. Now I would like to briefly update on our subsidiaries, namely AIF and Singapore Subsidiaries. Starting with the AIF, as mentioned in the past, AIF continues to be an important focus area for NAM India. Under Nippon India AIF, we offer category 2 and category 3 alternative investment funds and have a total commitment of INR 60.3 billion across various schemes. The company has started broadening its focus across asset classes. Towards this end, we recently launched our credit AIF and a long-only equity AIF. Fundraising is currently underway, and both funds have undertaken their initial closings. During the quarter, we successfully achieved the final closing of eight category 3 long-only equity AIF, Nippon India Equity Opportunities AIF scheme 8. We had launched a tech fund of funds in 2020, which was anchored by large Japanese institutional investors and corporate investors. This fund is in an advanced stage of deployment, with nearly 80% of the commitment raised and has been deployed across 12 tech ETFs and funds. On the optional fund, we have witnessed decent inflows in the quarter from various geographies, and we are positive that this trend will continue in the future. We will remain focused on fundraising from the international market and looking at business opportunities with subsidiaries associated and a larger network of Nippon Life Group. Nippon Life Japan also remains committed in supporting NAM India's offshore operations. We continue to see interest for India from conventional markets like Europe, the Middle East, Japan, and from unconventional markets in Nepal, Thailand, and Korea. Backbone to our financial performance. For Q3 FY 2024, revenues stood at INR 4.23 billion, up 20% year-on-year and 7% quarter-on-quarter. Other income stood at INR 1.07 billion, up 73% year-on-year and 37% quarter-on-quarter. Operating profit stood at INR 2.51 billion, up 23% year-on-year and 8% quarter-on-quarter. Profit after tax stood at INR 2.84, an increase of 39% year-on-year and 16% quarter-on-quarter. As an end-of-speech, I would like to also highlight, in line with the philosophy of the company in promoting internal talent, Arun Sundaresan, who has been with the company for 20 years, has been promoted to take charge of Head of ETF, and Amol Bilagi, who has been with the company for 10 years, takes charge of interim CFO. With this, I would like to conclude my remark and open the floor for questions. Thank you. 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 touch-tone telephone. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use handsets while asking the question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Swarnabh Mukherjee from B&K Securities. Please go ahead. Yeah, sir, good morning. Thank you for the opportunity and congrats on a good set of numbers. For my first question, was on the yield side. So the yield dilution that we are seeing this quarter, first on the, standalone business, if you could highlight what resulted in that, because it looks slightly more sharper, considering the fact that I understand maybe there have been some fund size increases which could have resulted in lower realizations in those, schemes. but the equity mix have also moved significantly. so if you, if you could maybe, break down the impacts granularly across, you know, these heads, which have been, the major factors for dilution. so that is the first one. On that also, at the consolidated level, the dilution looks slightly more. So, I just wanted to understand that in our other subsidiaries, apart from the mutual fund business, has there been any kind of impact on the yields or some capital we have received on which we are not earning? If you can throw some light on these two factors. I have a couple of more questions, and we'll ask them after this. So I'll request Amol to take this question, please. Yeah, yeah, thanks, Sundeep. So, sort of blended basis, I think, there has been a decline in mutual fund yield to around 0.4 basis point quarter-on-quarter. Again, this is in line with our stated how we have stated in the fund that we could see a 2 basis points-3 basis points yield compression on a year-to-year basis. Okay, and this is mainly due to the increase in the size of the equity AUM. Again, this is because of telescopic pricing formula of the SEBI-defined slabs. And again, this is also due to the increase in the share of new assets, which comes at a higher cost of acquisition compared to the older assets. So if you look at it, our net sales in equity, excluding index arbitrage for nine months, is almost 2.2x the net sales for the end of last year. And if you do analyze it, so basically it is 4x of the last financial year. So that is the main reason why there has been an increase in yield. Apart from that, I think on the other asset classes, I think there have not been any significant consolidation of the yields. Only in equity, we have seen marginal declining yields. So the yields would be the equity is within the range of mid-60s as of now. And under that, continue to have around 10.25 basis points-28 basis points of yields. On liquid, we continue to have 10 basis points-12 basis points of yield. And on ETF, we continue to own 15 basis points-20 basis points of yield. Right. And so you are seeing on a stock basis the yields. Yeah. So would it be fair to assume that the flow yields would be, you know, lower than this on the equity side? It could be. Less so, you know, not major. So just to add, I think if you exclude the ETF segment, actually, there the blended is actually increased quarter-over-quarter. Okay, okay. Understood. I also wanted to, on the ETF side, I just wanted to understand, you have given that December quarterly average AUM of ETF is around INR 93,000 crore. So out of that, how much is the ETF for assets, if you could highlight? I think the EPF has just started recently in July, so there would not be a very big number. Understood. So would it be, would it be somewhere, sir, in the range of maybe around, say, close to INR 4,000 crore or something? Would that be a fair estimate? Again, I think we'd not be able to give the exact numbers because of the confidentiality. I think, as we have mentioned in the past, you know, roughly, indicatively, ETF will be resting around INR 15,000 crore per annum, you know. But the exact numbers are all going to be very difficult for us to share. Okay, okay. Understood, sir. Also, if you could give some color on how to read the employee expense increase that we are seeing this quarter. So I think employee expense, overall cost has been the same. Whatever increase is, it increases in provision because of the provision that has been created for PLI and because the alignment of interest as the company profits go up, I think the PLI will also go up. So it's just in line with that. So there is no incremental additional cost or additional, you know, hike. This is the provision for the PLI which has been created. Okay, sir. Understood. So assuming that, you know, how the markets have done, etc., everything, so should we see a similar run rate in the fourth quarter also? Very difficult to predict. You know, I think none of our institutions will say that. But I think overall, the good thing is, I think the overall business that we are building up, I think we are seeing very strong momentum. And I think the new investors coming from small cities and towns, especially, you know, in our digital ecosystem that we have built up, we believe, I think, we'll be in a better position compared to the industry to see the flows going forward. Understood, sir. Okay. Thank you so much. I'll get back to speaking. Thank you. The next question is from the line of Pratik Jain from Motilal Oswal. Please go ahead. Yeah, hi. Sir, firstly, on the yield bit again, so you have been maintaining this 2 basis points-3 basis points all, which is likely to continue. How long should we expect this? What level do we see this kind of coming down to, you know, something like, you know, one basis point kind of a fall? Because, you know, the transition from old assets to new assets, I would have assumed that it would have a very less impact now given that, you know, it has been there for some time. So, or we are still above what level we would be with respect to old assets versus new assets? If some directional number you can share out here. I think in line with our approach of being conservative, I think we'll say, I think this can continue for two to four years. Can this come to one? Let it stay in a positive surprise for everybody. I think we have to be conservative and have a guidance that this can continue for two to four years or three to four years more. Any thoughts on the share of old assets versus new assets? Around 30%. Old assets are there. Okay, okay, okay. Got that. So secondly, with regards to the net inflows that we would have seen in this quarter or for the nine months, could you give some understanding as to how much of it was in the small cap fund and how much is the rest? Or is it quite, you know, distributed or it's driven largely by small cap funds or the mid cap funds? I think from our perspective, we continue to maintain a very, very diversified portfolio. As you are aware, a few months back, we had strong inflows into our small cap fund. So technically speaking, only incremental stocks can come there. I think we continuously see funds coming across our categories: large cap, mid cap, growth fund, focused fund. So we think we have a flow across all categories. So it will not be skewed towards one. I think our biggest thing, I think I'd like to be what we have been working on is to build a very granular distribution system and which has come to a point where we are happy to share with you at this point of time, the majority of the SIPs, 76% of our SIPs are below INR 5,000 and they have spread across various categories. And in amount terms, in number of investor terms, it goes in excess of 90%. But I think we have to have a granular approach. I think when diversified, when de-risk portfolio. Okay. So on this customer base, how many of your customers would have more than one scheme of Nippon and how do you plan to increase that? Again, very difficult at this time to say, but I think we are rather at this point of time in advanced development of AIF and I think trying to work on multiple things to increase the connectivity. As we talk today, I think it is something between 1.5-1.8. Okay, okay. Then my last question is on the distribution side. You know, we do have tie-ups with many, many banks, national distributors, but still, what would you attribute the way we have seen the improved performance? Somehow the market share increase seems to be lesser. You know, we could have possibly more market share given the fund performance has been consistently improving. What would you attribute that to and how can you, you know, change that to see further market share gains? I think very difficult to—I mean, it depends how you see it. I think from our perspective, one thing is very clear. We want to have more sustainable growth rather than heavy quick growth. So I think we are building a strong foundation. Across, I think our approach will remain. You know, I think definitely market share can increase by getting higher AUM or higher ticket size of SIPs. But I think our focus continues on smaller ticket size. And at this ticket size of SIP is INR 2,803. And I think, like I mentioned a bit earlier, 90% or above 90% of our SIPs are below INR 5,000. This correction of INR 10,000 earlier is below INR 5,000. We continue with our focus towards smaller business, which means business will grow slowly, but will be more stable and predictable. Any particular measures that you are taking on the distribution side that you can highlight? I think it's a continuous journey. Very difficult to say the one particular thing. I think the idea is to continue increase productivity, increase efficiency, and I think increase quality of engagement, engagement at each. All right. Thank you. Thank you. The next question is from the line of Abhijeet Sakhare from Kotak Securities. Please go ahead. Hey, hi. Good morning, everyone. So the first question is, if you can share the net flow market share for the quarter gone by. I think 2Q was about 11%. And Saugata Chatterjee to take this question. Yeah, hi. So the net sales market share is in excess of 10%. We continue to be in double-digit month-on-month and for the quarter as an average. Got it. And sir, within the SIP pool of money, what would be the share of the largest category or the top three categories there? I think while we individually do not give the category, I think the number, the top five funds that are about 80% for us. Got it. And again, some similar color on the SIP flows in terms of, you know, the improvement that has happened. If you can qualitatively or with some numbers give us a sense of where it is coming from, whether it's banks, national distributors, MFDs, fintechs. Yeah, cover the strategy side. So I think the most important part, and which is what Sundeep also did allude earlier, that we believe in a fragmented business approach. If you see the number of locations where we operate out of, close to 280 locations, you know, we have the majority of our business coming from mutual fund distributors, MFDs. The digital fintech platforms also have a very strong, you know, inflow of retail applications which come to us. And, you know, also the other categories which we cater to are these PSU banks, the national distributors. So we have a very large franchise of distribution network. Hence, it is not focused on a particular category which gives us business. Also, it is very important for us to note that we don't do NFOs, you know. And hence, it is a natural flow of business which is coming into all our products, which is a very important thing one should keep in mind when we assess the monthly flows. The other side is the SIP, you know. If we are, you know, incrementally increasing the SIP book, that itself shows that very strong inflow is coming from B30 markets. We have a very strong market share in the B30 space. And that too is adding to the granularity of the incremental flows which are coming in. Sir, one follow-up there. Can you give us some sense on what's been the trend, recent trends on SIP closures as well? If you've seen, you know, people also booking profits or, you know, closing their SIPs given the market levels. Yeah, so industry data, of course, you know, AMFI does publish that data which, you know, one can refer to. But in our case, you know, the net accretion of SIPs every month is much better than the industry data. We have about 30%-35% of the SIPs, you know, are closing. So we have a 70% net retention in the monthly SIPs which come to us, which is much better. Is that amount basis? 70% retention? In the count. In the count. Okay. All right. And sir, last one data question is, do you have the closing equity AUM and if possible? Maybe I'll share with you offline, you know. Got it. Thanks a lot. I could just read this question on SIP, Thilo just one thing. I think as I mentioned earlier, the smaller the ticket size, I think we have seen it is always more sticky. And that is the reason 63% of our SIP AUM has continued for five years compared to the industry of 27%. That's just for, as I mentioned earlier, but I think it will give you a little color. Also one small correction from my side. I had mentioned, the total number of SIPs below INR 10,000 is 75%. I think I mentioned earlier by bank. I think I just jump corrected on the number that we were at here. Thank you. The next question is from the line of Lalit Deo from Equirus Securities. Please go ahead. Yeah, hi. Good morning, everyone. So, honestly, on the yield side, so like as you mentioned that the equity yield is around in the mid-60s. So we have seen a sharp decline over the past two quarters. Like it has gone down from mid-70s to mid-60s. So can you qualitatively highlight the difference between the stock yield and the flow yield? Like what is the current status over there? Yeah, sorry, we don't share that kind of number. So we'll allow you to share that number. Actually, second, so one mentioned on the ETF side. So like in the volume market share, we have seen some decline in the overall volume market share in the ETF side. So like in the industry level, we are seeing that there are a lot of players who have been launching ETFs, not as clear from the ETF side. So what are the ways we are trying to do to dominate, to maintain this kind of a market share going ahead? Could you give us some sense over there? I think broadly that now if we look at it in two parts, definitely we've been a dominant player in ETF. I think our volume through the stock exchanges is 2,000 of the volume through ours. Definitely in ETFs, I mean, there can be a little plus point of the volume. But I think one thing that is to understand, unlike mutual funds, in ETF, two things remain very important: volume on the stock exchange and receipts. These two things basically drive future growth. So I think from our perspective, we believe we are in a very strong position. But definitely new competition can come, will come. And there could be a plus point of some of this thing of our percentage of volumes on the stock exchanges. But I think from our point of view, the focus continues on profitable growth. I think we believe, I think we do not believe that we'll continue launching ETFs at low cost because we do not believe that can increase volume. I think it's a tracking error and the liquidity which flows the most important thing. And we feel, I think, we are in a very strong position there. Gotcha. And so one last data key interesting thing. Could you give us the new SIP registration time during the quarter? New additions is INK 3.8 lakh. INR 3.8 lakh monthly. Monthly. Okay. This is one million. Thank you. Thank you. The next question is from the line of Sahaj Mittal from 3P Investment Managers. Please go ahead. Saugata, good morning and congratulations on a good set of numbers. So just two questions. What would be our unique SIP customers or unique SIP folios of the INR 68 lakh which we have? I think we will not have that number. The total number remains about INR 68 lakh. I was just trying to understand the overlap in SIP. I understand. I think as Arpanarghya said, I think that total number of folio count that we—it's INR 2.2 crore and 68 are unique, you know. But 68 are the folio counts of SIPs. I mean, if that was to give you color, that would help you. Got you. And what would be the average age of new SIP customers who are coming in? Just some qualitative comment on that. I think again, difficult to put a number to it because most of the SIPs which are being assigned now, I mean, they are five, 10 years plus. That is not important. The idea is how many of them stay. And I think, as I mentioned earlier, because of the granular business that we run and very small ticket size, what we have seen is stickiness is much higher when the ticket size is smaller. That's the reason, you know, 63% of our SIP AUM has remained with us for more than five years compared to the industry, which is about 27%. So sir, I understand the reason I'm asking this question is that is because the kind of frenzy which we are seeing in the market right now and given that the young millennial crowd moving to direct equities. So what would be the average age of new SIP customers? Is it that the new millennial customers are also coming through mutual funds via the SIP route, or is it only the customers over 35 years of age? I think it's a mixed sub. And we have seen a very positive trend. New investors, also young investors, are also coming through SIPs. I think I would say SIP is becoming across the industry a preferred route of investment rather than lump sum. Got you. Thanks, Arun Sundaresan. Thank you. The next question is from the line of Viraj Sanghvi from Banyan Tree Advisors. Please go ahead. Hello. Am I audible? Yeah, yeah. Please go ahead, Viraj. Yes. So I wanted to understand the mix of equity and debt in our investment book and investment versus cash balance in the investment book or stock summary. Sure. I think I'll request Amol to take this question, Viraj. Yeah. So in terms of equity, probably it would be 10% of our net worth would be invested in the equity. And that is more because of the seed capital requirements that we have invested in the equity schemes. Otherwise, mostly it is in the debt schemes only. This is 10% of your net worth? Yeah. Okay. And out of that 10%, most of that equity part will be invested in your own Nippon schemes, right? Own. They are 100% invested in Nippon schemes. Okay. Okay. Got it. Thank you. Thank you. The next question is from the line of Parth Agarwal from Pason Research. Please go ahead. Thank you for the opportunity and good set of numbers. I had just one question on the number of, you know, bank distributors which has suddenly increased from 77 in September quarter to 88 in the current quarter. Is there any reclassification involved, or can you help me understand this number? Yeah, hi. This is Arpan here. There has been a reclassification this quarter. There's no other change. We can connect offline for that. Sure. Thank you. That's all from my side. Thank you. The next question is from the line of Arushi Shah from Sushil Financial Services. Please go ahead. Hello. Am I audible? Yes, ma'am. Yeah. Thank you for taking my question. Number one is, could you just give me a brief idea on the blended yield and whether it's expected to, you know, flatten out and start increasing a brief timeline or something? And second question is, hello, is based on, like, our other income has shot up tremendously in the current quarter. Is it going to be prevalent, or is it a one-time thing? I'll request Amol to take this case. Yeah. Hi, Arushi. So Arushi, as I mentioned, the blended yield stands at around 41 basis points, okay, 40 basis points. And this is mainly due to, as we have maintained, that we will see 2 rupee basis point compression every year. So said that we have seen, what do you say, disproportionate higher net sales compared to the industry peers. And as for the telescopic pricing formula, this is impacting our equity yields, okay? And also I would like to mention that the new assets coming at the higher cost of acquisition versus the old asset is also impacting, has some impact on the yields as well. However, just would like to add that we have rationalized distribution cost in one of our flagship schemes in December in line with the lower TER given the increasing size. We will continue evaluating opportunity for similar rationalization in other flagship schemes to stem the flow of compression of equity yield. Okay. So as of now, we still expect certain compression for next foreseeable future, right? Yeah. As we have mentioned in the past, at least for the next two to four years, we will see compression in the overall blended yield going forward, yeah. Okay. Okay. And yeah. And how would that impact our margins per se? So again, it will be difficult to predict because it all depends on the flows in the on which category of money which coming to which category of schemes and everything. So it's very difficult to predict. But as I mentioned, we are working on various initiatives to address the declining yield. Okay. Okay. So could you just address the other income which is like, you know, it is about INR 107 crore this quarter and our run rate has been quite less comparatively in previous quarters. So is it going to be prevalent, or how is it going to be? So again, the other income is mainly due to the mark-to-market movement. So as I mentioned, so we have our investments across the mutual fund schemes. So depending on the capital market performance, because of the mark-to-market, the income keeps on fluctuating. So again, this quarter seemed the market has been very good. That is why there is a boost in the other income. But again, it all depends on how the market goes, and it could be fluctuating in the future as well. Also, what is our growth driver going to remain, you know, going further? Like, you know, like a bird now if I have to fly. So like, what is our growth driver going to remain, and what would, you know, be our weakness which would really, you know, restrain us from the sale? Yeah. From a growth driver point of view, I think the industry offers an enormous opportunity. The key lies in execution. This business is a scale business. I think I will continue, I think, from our perspective. As we today, in fact, our biggest strength is retail. Our biggest strength is small ticket size. And all these things, you know, I think as we go ahead, as we move, as the country moves from $3 trillion- $5 trillion or $7 trillion, as the per capita income goes up, I think more money will be coming into savings. And we believe we have a very strong platform that we have created, and we will continue gaining as the country grows and mutual funds become the preferred route of investment. Okay. Okay. And any, you know, weakness which we see which would restrain us from capitalizing on these opportunities? I thi nk with this business that I just said, both the weakness, I mean, if I were to say, I think we have to execute. I think we have to continue creating growth for our investors. I think that is, and I think, and continue working with a very strong risk management framework. I mean, these are the things we have to focus on. I won't call them weakness as we go forward. I mean, there has to be a very strong focus on risk management because I think ultimately the investors are trusting us with their money, and I think we need to continue creating wealth for them. All right. Got it. Thank you so much and good luck. Thank you. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Sanjay Kumar from ITHOT Financial Consulting. Please go ahead. Hi, Sid. First question, relating equity, can you give the growth in AUM net of middle and small cap? Just trying to understand how much of the growth is market driven. So just to Saugata's side, there's some broad numbers I can only share with you that when we categorize the net sales growth across large cap, mid cap, small cap, and the various other market caps, from our perspective, almost currently, as we speak, about 25% is coming from the large cap category. And that is growing for us, you know, for the last six months, which clearly shows that we have also deregistered our flows across the asset classes. And remaining categories obviously get the remaining 75% of flows. Do you have that figure for the industry as well? Industry, you know, obviously you can refer to the AMFI data, but the large cap category is actually just turned positive in the month of December. Till December, the large cap category was negative in the industry. Okay. Just to extend this, are we doing any counter-cyclical investment either on the large cap side or on the debt side? I mean, there could be a trade-off duration here in the rate cycle which will kind of help us broaden our business and be risk-averse from middle and small. Could you repeat that question, please? Are we doing any investment, say, marketing investment or on the equity side, on the debt side and the large cap side? Perhaps it's a continuous endeavor to further de-risking of business. That's exactly, I mean, it's not only from within equity and say multiple schemes in equity, but also from different asset classes. And further extending it too from mutual fund business to other businesses. So the company continues focusing on de-risking every product line, asset category, and business line. So we are definitely making efforts for that. Right. Then last question, how do we look at employee costs going forward? 17% year-on-year while revenue is up 20%. How much of it is linked to revenue growth or in a market correction will this impact our P&L? I think broadly from our perspective, we don't see any substantial change in our employee cost. There could always be other whatever, I think, the PLI is the only variable thing which is in line with depending on the profits, the percentage of profits, you know, typically. And over and above that, as and when, I think ESOPs are issued, you know, because that is important for alignment of interests from the employees and also from the stability of the team. I mean, that will be an expectation come. And broadly, we do not expect any major change. Okay. Thank you, sir, and all the best. And also just to add to this, even if we were to further expand our teams in more branches in small cities and towns, the incremental cost is going to be cost. Thank you. The next question is from the line of Lester Poon from Pedder Street Investment Management Limited. Please go ahead. I have one question. I read that your market share has been increasing in the past few quarters. Is that quite influenced by the investment performance of your mutual funds? It is on a high level. I think it's always a mix of multiple things. Investment performance has to be there. I think after that, it's about execution, reaching out, distribution, digital. Multiple things put together. But needless to say, I think in this industry, pe rformance is the starting point. I see. And now, and for your yield, I understand because of the total expense ratio, the equity size, when the weighting has gone up, you have faced some compression. But at the same time, there's a big difference in the yield between equity fund and the other, say, fixed income fund. So the improvement in mix should have helped your yield. That's why I do not fully understand why the higher equity weighting in your portfolio should necessarily lead to a yield compression. Yeah, hi, Lester. So as per the SEBI formula for TER, basic telescopic pricing, so as the equity AUM grows up, the ability to charge the TER goes down. And that impacts the overall equity yield. So even though the proportion of equity goes up, but because of this SEBI pricing formula, the overall blended yield comes down. Hence, you have seen the marginal decline in the yields for the quarter. Okay. I see. The marginal increase in the inflow cannot offset the decline of the overall portfolio, the compression of the overall compression. Do you understand what I mean? It will not have so much impact because the new money comes in at the latest rate, and the concentration is higher. Probably when you look at the overall blended yield, it will not have a major impact. I see. Okay. That's all my questions. Thank you very much. Thank you. As there are no further questions from the participants, I now hand the conference over to management for closing comments.