HDFC Securities: Nippon Life’s Market Share Remains Elusive
Headquarters of Nippon Life Insurance in Osaka, Japan. (Photographer: Tomohiro Ohsumi/Bloomberg)

HDFC Securities: Nippon Life’s Market Share Remains Elusive

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

HDFC Securities Report

Nippon Life India Asset Management Ltd.’s Q1 FY21 revenue at Rs 2.33 billion (-28.3%/-15.1% YoY/QoQ) was 5.1% below our estimate as outflows from the credit risk fund and a reduction of equity in the mix resulted in a lower yield.

Debt/equity quarterly average assets under management (QAAUM) market share deteriorated 246/235 basis points YoY to 7.5/6.8%.

Debt funds QAAUM declined 9.0% QoQ due to outflows and write-downs. The core operating profit was at Rs 966 million, -33.5/36.6% YoY/QoQ, mainly due to lower revenue.

Recovery in equity markets and decline in bond yields resulted in treasury income of Rs 1.03 billion (up 192% YoY), raising adjusted profit after tax by 24.3% YoY to Rs 1.56 billion.

Management stated that it raised capital from high networth individuals/family offices (75 plus), corporate (26/100 BSE 100 began reinvesting), and institutions (adds: 120 plus since October 2019).

Nippon Life is revisiting its investment policy with the intent of reducing the volatility of treasury income.

Click on the attachment to read the full report:

HDFC Securities Nippon Life 1QFY21 Result Review.pdf

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