Thank you, Rutuja. Good evening, everyone.

On behalf of Motilal Oswal, I welcome you all to the Aditya Birla Sun Life Asset Management Company Limited 2Q FY27 earnings conference call. We have with us Mr.

A. Balasubramanian, Managing Director and CEO; Mr.

Pradeep Sharma, Chief Financial Officer; Mr. Paritosh Chhitora, Head Investor Relations.

We are thankful to the management for allowing us to host this call. I would now like to hand it over to Mr.

A. Balasubramanian for the opening remarks.

Over to you, sir.

Yeah. Thank you for hosting us.

Good evening, everyone, and thank you for joining us on the Q2 FY27 investors call. I hope you all had the opportunity to read through our earnings presentation, which is available on both the stock exchanges and our company website.

Let me begin by sharing our perspective on the current macroeconomic environment. The global economy, as is known, demonstrated remarkable resilience in Q2 FY27.

Growth sustained its momentum despite a challenging external environment. The prolonged geopolitical conflict and inflationary pressures and El Niño and potential asset price corrections remain areas to watch, but the global growth outlook remains constructive.

India continues to stand out as one of the fastest growing major economies powered by robust private consumption, resilient services sector, and strong fixed investment alongside a positive contribution from net exports, and growth momentum in the first quarter of the year came in well ahead of expectations. Government infrastructure spending and private capex and robust credit flows are sustaining investment.

The IMF has revised its FY27 growth forecast for India from 6.4% to 7%, and RBI revised its outlook upwards to 7.1%, a reflection of confidence in the economic underlying strength. Economic activity has held firm even as we keep a close watch on the southwest monsoons and its implications for the upcoming rabi season.

In its October policy, the RBI raised the repo rate by 25 basis points to 5.5% and signaled a more cautious stance on inflation while reaffirming confidence in the growth trajectory. India's external position has been supported by healthy capital flows including NRI deposits, FCNR(B) balances, and forex reserves of over $730 billion, and these strengthen our external sector resilience and provide a cushion in times of global uncertainty and related currency volatility.

Moving to Indian markets, the quarter was marked by volatility amid elevated crude prices, high global bond yields, a weaker rupee, and shifting interest rates expectations. While large cap indices corrected, the broader market held up relatively well reflecting confidence in India's long-term growth story.

Steady domestic participation through SIPs and continued financialization of household savings helped cushion the volatility and underscore the structural strength of India's capital market. A busy primary market reflected strong appetite among issuers and investors for capital formation.

Looking ahead, near-term volatility may persist, but earnings growth and domestic investor base continue to provide a strong foundation for the longer-term outlook. Coming to mutual fund industry, the quarterly average AUM stood at ₹87.21 lakh crore as on 30th September 2026 compared to ₹77.13 lakh crore as of the same period last year registering a year-on-year growth of about 13%.

The SIP contribution for the industry stood at ₹31,490 crore for September '26 representing year-on-year growth of 11%. The total mutual fund folios stood at 30 crore as on September 2026 growing by 17% year-on-year.

During Q2 FY27, the industry saw total NFO collection of approximately ₹11,504 crore across asset classes with equity collection driven by index, aggressive hybrid, and value funds. Despite market volatility, the industry continued to witness healthy net inflows in equity-oriented schemes reflecting investors' growing preferences for disciplined long-term investing.

SIP flows remain resilient, and retail participation stayed strong. Investor preferences continue to shift towards mid cap, small cap, and flexi cap funds, a sign of confidence in India's long-term growth prospects and of participation broadening across market segments.

Individual average AUM for September '26 stood at ₹23.24 lakh crore contributing around 61% of their total AUM. B30 cities with an average AUM of ₹16.37 lakh crore accounted for 18.8% of total AUM growing by 13% year-on-year.

Deepening our reach in B30 is a strategic priority for us as this is where India's next chapter of wealth creation will come from. We are building our distribution network, digital capabilities, and investor engagement in these markets to be well-placed to capture the opportunities ahead.

Coming to the ABSL AMC performance highlights, at ABSL AMC we are pleased to share that our overall average AUM including alternate assets, which is the EPFO mandate, crossed ₹11 lakh crore milestones this quarter and now stands at ₹11.06 lakh crore, a growth of 140%. This includes mandate money from ESIC and EPFO.

Our mutual fund quarterly average AUM stood at ₹4.42 lakh crore up by 4% year-on-year. Within this, our equity mutual fund quarterly average AUM stood at approximately ₹2.09 lakh crore growing by 9% year-on-year.

Our equity mix for the quarter stood at 47.4%. Our SIP contribution for September '26 stood at ₹1,095 crore supported by 41.7 lakh folio contributing SIP accounts.

Total investor folio for September 2026 stood at 1.14 crore up 6% year-on-year with the new SIP registration for the quarter at about 7.04 lakh approximately. Our equity fund performance continues to be consistent.

This has strengthened our investor confidence and supported healthy inflows across flagship offerings like flexi cap, balanced advantage fund, multi asset, and small cap funds. In fact, our equity performance now gone to almost three and five-year basis as well coming in the reckoning of the peer group is also good news.

I think should eventually help us in building more stronger equity flows. Strengthening and diversifying our distribution network remains the key priority.

Through my yatra covering nearly 9,000 kilometers across India, I've had a stronger, more meaningful conversations with our partners and gathered valuable insights from the ground. This will deepen our engagement with distributors in both existing and emerging markets helping us build a stronger and more diversified distribution franchise.

On the technology front, innovation remained at the heart of our customer-first approach. During the quarter, we advanced our AI-first agenda by expanding our GenAI-enabled capabilities across chat bot, voice, and WhatsApp channels creating more personalized, responsive, and scalable customer experiences.

We are also leveraging data analytics to strengthen customer acquisition, investor engagement, partner productivity, and service effectiveness across our distribution ecosystems. Turning to our alternate business, we've witnessed strong growth during the year.

Our PMS, AIF assets increased from ₹30,300 crore to ₹6,50,000 crore, which of course includes the EPFO mandate that we have got. We currently have fund raising under way for our special opportunities and structured opportunities money manager fund and India sector fund especially in the specialized business both including fixed income as well as equity categories.

These offerings are aligned with investors' demand for differentiated and specialized investment opportunities. In our real estate business, our AUM stood at approximately ₹860 crore, a 43% year-on-year growth.

Fund raising is currently under way for the Aditya Birla real estate credit opportunities fund Series 2, which focuses on senior secured lending opportunities in post-approval brownfield real estate projects across Tier 1 cities. At GIFT City, we have launched our retail fund offerings enabling Indian and global investors to access inbound and outbound investment opportunities through a dedicated retail platform.

Fund raising is under way for the ABSL flexi cap fund, which is for inward remittance. In the coming quarter, we plan to launch six funds across both retail and non-retail categories addressing inbound and outbound opportunities.

Backed by a growing product suit and GIFT City global investment ecosystem, we are well-placed to build a scalable offshore franchise in the coming years under the LRS scheme as well as for global investors investing in India. Passives is one of the key anchors for our growth strategy, and we are committed to building a leadership position in this segment.

In fact, we have introduced Birla Passives as a new brand, a dedicated brand, to strengthen our visibility to investors and distributors and drive higher mind share and grow market share. During the Q2 FY27, our passives quarterly average assets under management stood at approximately ₹33,890 crore up 10% year-on-year.

Our investor base continued to expand with the total folios reaching around 17.9 lakh folios. We are the first in India to launch BSE total market cap index fund and a BSE total market cap ETF.

The pioneering a new category in the passive investment landscape on the lines of Vanguard, the largest fund in the world. We aim to build these funds into flagship product offering investors broad-based exposure to the Indian equity market through a single and simple solutions.

Our ETF franchise delivered particularly strong momentum. ETF quarterly average AUM grew by about 42% year-on-year and significantly ahead of the industry growth of about 27%.

In the apex segment, which is a new segment which SEBI had introduced sometime back, our SIF segment, we launched the equity long short fund and equity ex-top 100 long short fund backed by our strengthened investment team with the specialist in long short and derivatives-based strategies. Our SIF platform now comprised of three products with the total approximately about ₹700 crore as of September 2026.

Coming to the financials, Q2 FY27 the total revenue is about ₹526 crore as compared to ₹506 crore in Q2 FY26. Q2 FY27 profit before tax is about ₹293 crore as compared to ₹316 crore in Q2 FY26.

Q2 FY27 profit after tax was about ₹221 crore as compared to ₹241 crore in Q2 FY26. Turning to our half-yearly performance, our H1 FY27 total revenue is about ₹1,142 crore as compared to ₹1,072 crore in H1 FY26.

Our H1 FY profit before tax is ₹702 crore as compared to ₹688 crore in H1 FY26. H1 FY27 profit after tax is ₹530 crore as compared to ₹518 crore in H1 FY26.

With this, I would like to open the floor for any questions. I'll be joined by Pradeep Sharma, who is our CFO, for taking any of the questions that you may have.

Hi, thanks so much for the opportunity. My first question was on costs.

On ESOP, we had a [presentation?] a new scheme [unclear]

Is it better?

You are still not audible to us.

Hello? Is it better?

Hello?

Hello, can you hear?

still breaking.

Good evening, and thanks for the opportunity. My first question is that in terms of employee expenses, we have seen a very big increase.

Even if I say exclude the ESOP expense of say ₹10 crore which was there last quarter, the growth seems to be very high. What could be the reason for that?

Yeah. Mohit.

Basically, this is on three counts, the the YoY basis you are talking. Basically one is the ESOP cost.

For this quarter around ₹12 to ₹13 crore is the ESOP cost, which amounts to around 13% increase. Second is actually last year, last year number there was a old provision reversal of ₹6 crore in last year numbers, and hence this is actually resulting into some kind of growth which is visible which amounts to around 6%.

That was one-time in last year numbers. Hence it is being shown as increase.

Third one is the normal increase on YoY basis plus the few headcounts which we have built our passive team, etc. These are the three reasons basis which the number is higher than last year.

For coming quarters, I think the number should be in the similar range of Q2.

For employee increment,

that is already covered.

It covered here.

All three.

That is helpful. Secondly, sir, on the key schemes, the flexi cap, the balanced advantage fund, just wanted to understand what were the gross flows during the quarter and how did the investor preference for these schemes increase during the quarter?

Yeah.

While we don't give a specific gross flows and net flows types, but I'll give broad indication. See, we have identified four, five categories of funds are the key products, which is the general flows also from industry, which is right from flexi, balanced advantage, and multi asset, multi cap fund and small cap and mid cap fund.

In fact, each of them we are seeing increased flows on a quarter-on-quarter basis both on the gross sales as well as on the net sales number. That's something which I see as a trend.

Though we see the category in which generally the level of interest is low like ELSS scheme where we have seen significant outflow along with industry, even large cap to some extent. Otherwise the core funds which I call focused funds, we are seeing quarter-on-quarter basis improvement.

That's something which I can see. Second, with respect to the even SIP contribution, the way I measures is month-on-month basis how the gross number is getting better than the previous month.

That also something I see as an improvement. Just to give a broader thing, the way we receive is so assuming the industry market share say in flexi cap fund say we are at say 3% 3.5%, whereas the net flows market share is actually higher than 3.5% kind of things.

Just to give you a bit of pulse.

You mean to say we are around 3.5% in the flexi cap and balanced advantage fund, right?

It now goes to almost about 4.5% kind of thing, roughly about 4.5% to 4.8% kind of a number, whereas the same number would have been lower in the previous quarter. That's something I see as a trend improvement.

Right. That's helpful.

I would

just also add to that even as a balanced advantage fund as a category, while the whole category is normally receiving significant flows at this point of time, whereas we are having flows because of improved performance

and

some bit of allocation could happen from weak-performing funds to the better-performing funds. Therefore, we have seen a positive inflows as well as even balanced advantage fund concerns as well.

That's very helpful, sir. Sir, a few data-keeping questions, sir.

One is basically the non-mutual fund revenue for the quarter, SIP AUM, and segment-wise yields.

Yeah. Mohit, the SIP AUM is around ₹86,000 crore as of September '26.

As far as yields are concerned, equity, it is in the similar range of 63-64 basis points. Debt is around 24 to 25 basis points.

Liquid is in two is in the range of 12 to 13 basis points, and ETF around 8 basis points. As far as other revenues are concerned other than mutual fund revenues, alternates, this is gross on gross basis, it will be around 7.4%.

We are seeing an improvement here. From Q1, it was 7.1%.

Now it is 7.4%. On net basis, it is 4.3%.

Q1, it was 4%. Gradually, we are seeing an improvement in the asset mix, mutual fund versus the alternate assets.

Yeah. Right.

That's very helpful. Thanks, and wish you all the best.

Good evening, and thank you for the opportunity. I had just one question on the mandate which we have won.

Can you please help with the gross yields which we are expecting out of the EPFO and ESIC mandates? Thank you.

Mr. Ram, actually this yields are actually expense neutral.

Whatever expense which we need to incur additionally, that's that.

The way I look at, Ram, of course winning the both the mandate reflects the fund's capability in managing money in the long term both on generating return as well as managing risk. They go through various parameters basis which the short happens both technically and financial qualifications.

Happy to share with you that we passed that test which of course reflects our fund house capability on the investment world. Second is while it's a cost neutral because the existing team only will be managing it.

Of course, I would have dedicated team for this, no doubt. The existing resources will be put into manage money.

That's the way they gone about selecting it. The rub-off effect that it can come to us in the other a private EPFO manage funds and so on and so forth.

Even when we look for mandate from overseas, the rub-off effect, that's something which can add to that is quite high. That's the way even our strategy also is bidding for this kind of mandate is quite a prestigious mandate.

Incremental cost should be fine. That's the way we build it up.

Of course, I'm sure over a period of time and thing changes, it can add to a few basis points profit as and when they permit, of course.

Thank you so much. That's it from my side.

Yeah.

Thanks for the opportunity. I hope I'm audible this time.

Hello? Is it better?

Okay.

Hey Shreyas, since you have some questions, after the call, and then address your question as well. Since we are not able to hear you properly.

If you're okay, we can do that. Yeah.

Hi. Sir, a few questions.

Firstly, some broader questions. How do you see the industry kind of moving with respect to flows?

SIP has held up strongly, but large lump sum flows have been a bit of a challenge in the recent past. How do you see that?

On the other hand, we've seen very strong traction in SIF inflows. Do you see that the AUM or the flows are moving from mutual funds to SIF or some other categories where, especially in the medium ticket size where earlier this option was not there?

Competing products were probably PMS and AIFs, which were at a much higher ticket size. However, SIF is at a much lower ticket size.

Do you see that change happening, and would you say that from a medium-term perspective SIFs could be a product where things can be very different? That would be a first question.

I'll ask other questions later. Yeah.

Yeah. Thanks, Prayesh.

From a broader view, I think general sentiment towards comfort and sentiment towards investing in mutual fund remains. Because I have been traveling extensively wherein general negativity which otherwise used to witness in the past during this kind of volatile time, uncertain time, generally doesn't prevail at the ground.

Second is there is a common question, of course. People have understood SIP investing, therefore that will remain as a permanent way of gateway through that mutual fund will continue to get money.

There is a segment of people who also want to come with a lump sum with a fast track SIP kind of thing, fast track STP kind of thing. There is an interest which is there.

Of course, beyond a point money will have limited, what do you call, availability. Then interest rates going up now so far is coming in the bond market side, but not reflecting so far on the deposit side, because the FCNR deposits coming in with huge liquidity.

Banking industry is not actually pursuing hike in interest rate on deposits. Therefore, I would assume the overall growth momentum for the mutual fund industry would remain.

I also feel that wherever the significant flows have gone in the last say 2-3 years, people also realizing there is a bit of need to reallocate funds from one to other. That's one coming, especially when it comes to the question of Birla funds.

I think there is a widespread acknowledgement that is coming from all our partners and investors, and Birla's top performance have been pretty good. Therefore, how do we reallocate money towards Birla, that also is coming in, which is what I make a feel.

While industry will remain and probably should also start getting that reallocation of funds from one to other kind of things may come in the absence of incremental money being available. As far as the SIF concerns, see SIF is being considered as arbitrage plus plus kind of thing.

It's a two ways that people look at it. One is the hybrid fund is considered as a arbitrage plus plus kind of things.

Something is the option that money manager has got to go short in the market and take a view. Therefore for this category, the number of people are qualifying for selling this category because there is an exam that they, of course, along with AMFI exams, there is a chapter which also they have to clear for the SIF selling.

That's something number of people undertaking the SIF license is rising. Second is even the people who have been otherwise funding in the market on their own, now they experienced the last six months, even our own funds have been in the top-performing fund in the hybrid long short category which is take into account the arbitrage plus options plus IPO investing and also managing the portfolio with some kind of hedging mechanism using future.

I think people are noticing it, and the return has been, of course, much better than what you would have got in the other funds during the current market period. Therefore, people have realized some bit of allocation could go there.

Other way things are moving definitely more and more allocations as an addition to the existing funds' allocations would come into SIF. We as a fund house, we didn't want to be the first one to launch in the month of March when it was allowed.

We wanted to actually have that skill set, dedicated portfolio manager. Therefore, we had a three people now running this business for us, a dedicated team who breathes options, who breathes F&O at the same time looking at hedging as one of the mechanisms by going short wherever the views are there.

This seems to be giving good experience. I think people do want to try it out.

Therefore, we are actually pushing it. Whether it will become a large category, I would probably say the way the product functions is high probability it can fit between the conservative hybrid category to the aggressive hybrid category.

It could come somewhere in between in terms of size. Today if you look at it, conservative hybrid category comes into equity savings fund.

Then comes to balanced advantage fund category. Then the third is actually aggressive hybrid category.

This could fall between balanced advantage fund hybrid category aggressive hybrid category to which extent people are looking at this as a asset class. Whether the large flows will come at this point of time, I think the short while of about nine, six months, the industry has become about ₹31,000 crore.

Of course, largely is money has gone into who took the lead. As we start seeing the performance track record with the somewhat genuineness in terms of using the tool that has been given to the manager and true-to-the-label kind of thing, once you start seeing it, we'll see this category gaining some kind of traction.

This will fall between balanced fund category and hybrid asset class category, aggressive hybrid category, I would say.

Right. Thank you, sir, for that elaborate answer.

Just one more point on this before I move to the next one. As a unit economics of SIF, how would it kind of look versus, say, alternates or equity mutual funds?

Would it be in terms of yields similar to what you earn on equity mutual fund or would it be more linked closer towards PMSs, AIFs? What would be the unit economics that at a sizable scale would it be more profitable than mutual fund business?

Sure. Just Pradeep is answering.

Prayesh.

Actually, SIF categories are little higher than our debt categories and lower than equity category. If you see these are in between equity and debt categories.

While what Pradeep is saying is the current model. Eventually, the way they will evolve is the three four five categories are there in this category, which is the long short hybrid fund, which will be akin to arbitrage plus plus kind of things, which will be more or less falling in what Pradeep is mentioning.

If I go to the higher end of the category, which is basically long short equity, and then the other than next 100 long short equity, and then the sectoral fund equity when it comes, the margin could come closer to about equity funds given the fact that we need also take care of the distribution commission that is involved. Then the fixed income, there is another category they are permitted, which is the fixed income credit fund also can be launched under this category.

That may come like our dynamic bond fund wherein we get about 50 to 60 basis points kind of thing we get. That the way it could evolve.

Right now, it's too early to say in which direction it will be. As the size starts coming in, even when we look at building these each of this category, we'll try and actually somewhere look at what the risk is involved and what is the purpose it serves, and accordingly, the pricing will get fixed.

Got that. Sir, the other question is on your flows.

While we don't share flows data as such, but it would be great if you could share some insights into what was the exit rate for us in the sense that whether our exit rate flow market share was better than our AUM market share? Have we reached that stage?

Honestly, in terms of SIP, again, while there is some pick up in the data points that you have shared, but it's still not reflective of the strong fund performance that we have. What are the initiatives that you're taking to kind of increase both the flows as overall flows as well as SIP?

Yeah. I think two, three things.

In terms of our focused product, as I mentioned, we are seeing is increased traction. The way we look at is in terms of quarter-on-quarter basis how the numbers can come, which is essentially take into account the flexi cap fund, the multi cap fund category, even the balanced category, multi asset gain fund category.

That's something we are seeing flows coming in about six, seven products including small cap and mid cap, we are seeing. Of course, as you rightly pointed out, the rate of growth and each of these things should move up.

That's why I think the initiative that you are taking is to drive the engagement with the distributing partners and communicate very strongly in terms of how we are doing vis-a-vis the market, vis-a-vis the benchmark, vis-a-vis the peer group. In fact, 85% of our funds are beating the peer group in addition to beating the benchmark as well.

Those are the communication need to be communicated in terms of narrative very strongly. Birla as a fund house needs a lot of attraction on these improvement that you have done.

Therefore, basically driving it through the communication. Engagement at the ground level is gone up quite significantly.

Second, in order to drive the sales team for the SIP improvement, we've even set a target for the whole team both by way of setting a target and also incentivizing them to get a larger success by way of SIP drive. That's something again, we rolled it out for each of the location-wise improvement that individuals should build on the basis of this.

The third is, of course, visibility. Generally as a fund house, this last 2-3 months, we've increased our visibility by way of brand expenses.

That also something which are doing like small cap education that we are doing. We have printed the entire country and select pockets of country.

Again, to ensure that our brand recall also comes and support comes both in the digital platform as well as the physical platform, which is the traditional platform. These are the initiatives that we are doing.

Last but not the least is the proof of these things also comes from our product recommendations. Some of the key large national distributors or bank distributors who predominantly go by the product recommendation to their investors' wealth management team or maybe the PBG team.

In fact, I'm happy to share with you in three or four channels the large channels, of course, we have about 32 channels in which we have products are being recommended at least. At least the four or five channel which gives a volume as well as have a high reach.

In those channels, the products being recommended, therefore, even the exclusive channel team members across the country, now they're getting an opportunity to increase their connectivity. Therefore, they can engage more and then also get more what do you call subscriptions.

These are some of the things we are doing. Hopefully, these things, I think, should give us an incremental continuous progress.

Any comment on whether your exit flow market share was higher than your AUM market share?

Yes, basically the way we've looked at is I think from each quarter-on-quarter, we did some analysis, again, is more for internal purpose. The ratio of exit with respect to the redemptions versus how much is being retained.

The retained ratio, suppose somebody has redeemed ₹100 crore, out of which how much is getting retained. The number goes to almost about 25% to 30% kind of retentive that we have.

It used to be somewhere around in the past or maybe 4% to 5% in the past. That retention ratio is increasing.

There's two ways that that's something which we try to do. Of course, we cannot stop redemptions on those schemes which are currently not in favor.

At the same time, performing in those schemes is very important to the extent the redemption can be reduced. Second is whenever the redemptions are there, we also encourage them to move into other funds.

Either way, he's going to remain investors in the schemes in the fund. That's something we are encouraging.

Therefore, switch is also to some extent, I would say, the ratio has been rising. The similar way, even when I travel in the market, people do ask questions about incremental money being given.

That also something I see is an acceptance coming from people where been giving more allocations, but the experience is not that great. Even those kind of investors also now expressing interest to restart some of the things that would have probably stopped in between.

That also I see as a one of the trend that is coming in.

All right. Thank you so much, sir.

Hi, sir. Thank you for the opportunity.

Just had a question. One is since the mandate [unclear]

Is this better now?

Thank you for the opportunity. I have a question on the mandate.

Since it's profitability neutral, can we expect some flows on the debt side or the ETF side, or what other benefits can we see from the mandate?

Yeah. The mandate, of course, every mandate that come from the government, we need to be competitive both on the technical qualification as well as financial qualification.

Therefore, it doesn't give any added advantage that, okay, we have won this mandate, therefore, all other mandate will become natural. At the same time, there are many such mandates could come from other providers of mandates who are actually outsource investment mandate to outsiders, other fund houses.

It definitely puts us in terms of [tier?] , it definitely helps.

Second is, as I mentioned, there is a privately managed EPFO which run on their own, then naturally it increases the entry barrier. That improves that.

Therefore, it can help in increasing the flows coming from privately managed assets with the attempt that we are making. Third, of course, when you are also looking at winning mandate globally as and when that comes in, it helps in terms of overall credibility including public sector units, it actually adds to the overall credibility.

That's the way I call rub-off effect is quite large. That's the only we can also build the scale.

That we have one of mind building scale is one of our key growth mantra. In that, it helps.

The only thing is as a fund house, we also ensure that while we have to manage this kind of money, we ensure the cost is also kept under control without compromising on the quality of service, I'm supposed to provide to each of these mandates.

Got it. That's helpful.

Secondly, if you can help give some color that the flows on flexi cap have been pretty strong and good in the last quarters. What could be the mix over there?

Is it the same mix that we are seeing on the equity front between, say, 50% to 52% MFDs and direct and between the national distributors? Or is the mix different for, say, a flexi cap fund, which is quite strong performance fund?

The way I see is in terms of flow of funds, definitely of course flexi gets a little higher than other funds given the fact that it is part of the recommendation list everywhere. Second is general acceptance on performance improvement quite visible and deep in their understanding.

Therefore, the urge to give allocation towards this is rising. Otherwise broadly when I look at it, MFDs and each of the channel partners as a fund house, roughly about 52% of our funds is come from MFDs, which is what our engagement is with them quite gone up quite significantly.

Second, of course, the national distributors roughly for about 20%. The bank is about 10%, which is what I think I'm mentioning that now the products are part of recommendation list is incremental share coming from the banking channel is rising, specific to the flexi cap fund.

Direct channel something is remains about 18%. That we continue to drive both in institutional segment as well as on the HNI segment.

Just to answer your question, in terms of flexi cap, the recognition is good. Understanding of people that there's a one or two funds of Birla fund house if you have to take large exposure, flexi cap is an automatic choice that comes in.

That's something which I'm seeing as a incremental growth number comes in that segment is rising. Same way, we are seeing the multi asset allocation fund where performance improvement has been quite good, it was quite visible.

Same comes in the case of balanced advantage fund and multi cap fund. Even small cap fund used to miss some kind of flows.

Even the small cap fund, our flows have been better than each quarter, I would say.

Great. Lastly, is there any new addition in any of the bank's recommendation list during this quarter?

Yes, I think four, five banks have come. Of course, the latest addition is part of the largest private sector bank where they added more product.

We're already part of the Kotak channel. Otherwise, ongoing basis, we keep seeing the addition keeps coming in.

Great. Lastly, sir, what would be your pipeline on the equity side more specifically and even overall in terms of new product launches?

Anything on the thematic, sectoral fund that will be

In terms of our product, currently of course in terms of pipeline, apex, that SIF that will continue to push. We have finished our fund launches.

Now we are promoting aggressively to get our rightful market share. Second is in the passive side, we launched a product which I think will become part of the permanent flows, which is the total market index fund as well as ETF fund.

Third is we have launched a financial services sectoral debt fund given the fact that yields have gone up, and we've launched it as one of the open-ended product. In terms of our alternate product, clearly real estate credit opportunity fund Series 2, currently right now we are in the fund raising, intend to close it by December.

In the same way credit opportunities fund. From the GIFT City, we have two products, one for the emerging market fund, which is outward remittance on LRS.

We have a great track record managing money in the emerging market. With the same fund, we have relaunched it.

Hope to get some good decent flows in that. India growth fund, which of course will use the best of Birla to invest in as a fund of fund from GIFT City that again for inward remittance in addition to flexi cap fund inward remittance that we have.

Other than that, of course, we have evaluated the product gap between what SEBI has offered and what competition has got and what we have, and we identified one or two funds in the category that we can of course launch it. We already filed with one product with SEBI.

I think yet to file with SEBI, I think. I think once it is done, we'll have one or two open-ended equity product on the basis of the gap including the lifecycle fund we would plan to launch soon.

All right, great. Thank you.

Thank you, sir. Firstly, if you could just quantify the ESOP cost that would come through in '27, '28, and '29?

Also given, I think, we've launched a new ESOP scheme as of today, if I'm not wrong, any changes because of that?

Sure.

Gaurav. The scheme which has been launched yesterday, that may have impact of around ₹14 to ₹15 crore per annum, roughly around ₹3, ₹3.5 crore per quarter.

Earlier schemes which are already going on, roughly the yearly impact would be between ₹55 to ₹60 crore in coming two years. Yes, yearly impact.

₹55 to ₹60, yearly impact.

Yeah. It is also coming on the basis of broader strategy for both employee reward and then reward them for their long-term performance.

That's something we rolled out covering largely the investment team and some of the other members of the AMC.

Sure. Sir, this would be basically ₹55, ₹60 plus ₹14, ₹15 crore for two years, right?

Just to clarify. This year and the next year.

Yes. Yeah.

Okay. Understood.

Secondly, could you quantify the SIP AUM, please?

SIP AUM is around ₹86,000 crore.

Okay. Sir, lastly, I think on the direct side, there is probably something to be desired as compared to our peers.

What kind of steps are we taking to kind of shore up our direct channel, right? I think in equity, we are at about 18%, which is probably one of the lowest.

Just wanted your thoughts on that.

Sure. No, we of course build our direct team because we are not pretty early in the building of direct team in fact was introduced.

In other ways, we do work with, of course, large distribution community as well as build our own base. I think we now have almost about 80 people dedicated in 14 locations in which they operate reaching out to our existing direct customers who have used to have a lot of large HNI base pre-2020 versus now.

All those customers, one, who have been investing directly. We have stepped up our focus in terms of reaching out to them.

Second is a lot of referral systems through which either through the existing systems, existing customers, or through our own ecosystem, which includes ABG systems as well as ABC systems and ABCD systems, and work together in order to build direct customer base. That's something we are doing.

Wherever, of course, gap areas are there, as you rightly pointed out, we ourselves have identified is an opportunity that we need to step up our focus. We divide them into three parts.

One, the customers who are greater than ₹1 crore will be handled by these 80 people. Operation team, which of course we call it service to sales, anywhere between ₹25 lakh to ₹1 crore will be handled by that team.

We've divided that team into two parts. Third is, of course, virtual relationship manager AI chatbot connecting with customers and often promote our product.

That's something we do. These are three channels through which I think we are driving it.

Of course, it needs a little more aggressive growth momentum. That's something we have identified as a focus area for sharpening the execution skill on this.

Sir, if I could just squeeze in one, what would be your thoughts on surely we are seeing performance in the one-year bucket improve phenomenally, and it's also kind of enhancing in the three-year bucket, not probably as much as the one-year because of the lag effect. What are your thoughts on profitability versus growth, right?

Would you not mind paying up extra to distributors and getting some more flows, or what's your thought on that?

We're quite balanced in our approach. At the same time, we also understand that we need to push aggressively on sales momentum.

We do the right balance between keeping in mind wherever there's a product in which we need to be little aggressive in the beginning in terms of acquisition of money, and then subsequently their profit will come. The way we looked at is any incremental growth that comes in is not going to come at the cost of my profit margins, profitability going down.

Maybe the margin on incremental assets will try to of course maintain it, but still it'll actually add to the That's the approach we take. At the end of the day, the idea is actually to invest on the business and build our scale, which we deserve.

At the same time, just be mindful of the cost that we incur. That we keep calibrate it on a continuous basis.

Sure, sir. Perfect.

Thanks so much for answers. That's it from mine.

Hi, sir. Thank you for the opportunity.

Sir, I have one question, which is on the scheme performance. You mentioned the scheme performance has improved, and we have seen some indication on the SIP flows and SIP count as well.

Can you give us some color around the flow share? Have you seen rise in flow share from the fintech side or the MFD side?

How are the early signs being? Any color on the scheme category where we have been seeing humongous amount of flows coming in from each of these channels?

Yeah. Shobhit, I just mentioned about this in my earlier answer to the question.

Broadly when I look at it, in terms of count, definitely roughly about 55% to 56% of the count is coming from the digital platform, and rest of it is coming from the traditional platform. When I look at the same in the form of amount, absolute amount in terms of contribution, definitely the digital channel is very lower in ticket size.

Therefore, that's roughly about 18% to 20%, and rest of it is coming from the traditional channels, which again mentioned earlier. The traditional channels where we are seeing incremental flows coming from both MFDs as well as banks and national distributors.

Of course, the rate of growth on a quarter-on-quarter basis is getting improved. Which is what, I think, we are also trying to push.

Then your second question was Yeah, this is the only question, sorry.

Incrementally, have we seen the flow share increasing because of the scheme performance which has improved, or traditionally, it has been on the similar lines, sir, specifically on the digital platform?

Yeah. See, basically Yeah, the way we began the narrative is first and foremost, the perception of improvement of performance should be changed.

Second is performance improvement should be accepted, and basis which people should start allocating flows. In fact, the first round of perception improvement that got changed quite significantly, and as you rightly pointed out, almost about 85% of the funds 75% to 80% of the funds is in the Q1, Q2 vis-a-vis the peer group, and 85% of funds are beating the benchmark as well as peer group.

From a one-year, it traveled to about two now is about three years. Even three years basis, 70% of the funds are in the Q1, Q2.

Which is what is being noticed. Again, the core funds, which are essentially where the major allocation happens, 60% to 70% allocation comes in the core category or maybe focus category, we can call it, which I again mentioned the names earlier.

Those funds, we are seeing on incremental basis flows is getting better. Definitely, few basis point improvement ultimately if it keeps improving, it would lead to a larger share coming in.

Okay. Got it, sir.

Thank you, and all the best.

Hello, sir. Thank you for the opportunity.

The first question is to understand the expectations in terms of cost growth for the year. The second one would be the breakup of your investment book.

Yeah. Investment.

First is cost.

Komal, cost would be, I think, the inflationary impact would be there. Other than that, we have already factored in the ESOP cost which was little higher this quarter.

I think that will continue as we discussed little before. I think cost would be in line what is there in Q2 and accept the inflationary impacts both in employee cost as well as the other business cost.

The second question was on Investment book. Yeah.

What is the question on the investment book?

That's right. Investment book.

What was the question?

The breakup of the investment book

in

terms of equity, debt, and alternates.

We have around ₹3,800 ₹3,890 crore as of today our investment treasury book, which is deployed across largely into debt mutual funds and corporate bonds and partly some share into equity schemes, which is in line with the consistent investment policy which we have. Equity share is between around 17% to 18%, rest is all debt and corporate bonds.

Yeah.

Got it, sir. Thank you.

Thank you, everyone, for joining us today. If you have any further questions, please contact our IR Head Paritosh Chhitora.

With this, we conclude the Q2 FY27 earnings call. Thank you.