Thank you very much. We will now begin the question -and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Swarnabh Mukherjee from 360 One Capital. Please go ahead.

Hi sir, thank you for the opportunity and congrats on a great set of numbers. Three questions, sir. First of all, on the yield movement this particular quarter, just wanted to understand whether this is primarily a product mix shift towards the ETFs or is there anything else to read into that in terms of how the expansion has happened in terms of the margin? And also, if you could call out the yield by category, including the ETF category also, how it has played out this quarter vis -à-vis last quarter? That's my first question. Secondly, sir, in terms of the SIP flow numbers that you have reported, the numbers have been broadly in that INR 3,600 crores to INR 3,700 crores kind of a range over the last 4 months, 5 months, 6 months. So, I just wanted to understand what is -- how should we think about this trend going forward and in terms of the flow in the various schemes that we have, has there been any change or movement? And if you could give some colour on new SIPs created vis-à-vis the redemptions that would be very helpful. And in conjunction, if we could also discuss about the net inflows in equity and active equity category, how they are looking vis -à-vis the SIP flows. And lastly, sir, yes, just one last question on the ESOP cost, how to think about next couple of years?

Yes. So Swarnabh a, the yield movement is mainly due to the change in the asset mix as you mentioned, that has resulted in a slight increase, marginally higher yield in the current quarter. The yield on equity is 53 basis points, 55 ex-of arbitrage. On debt, it's 25 basis. On liquid, it remains in the range of around 11-12 basis points. On ETF, it's slightly higher than 25 basis points overall. So blended yield is marginally up QoQ basis. And on the ESOP cost, for Q4 FY26 ESOP cost is INR 11 crores. The overall ESOP for the current year is INR 43 odd crores. And for the new plan, the next year ESOP cost will be in the range of around INR 35 odd crores. The overall cost on ESOP of the new plan will be in the range of around INR 70-75 crores over the next 4 years.

Okay, for the next 4 years and we can take a staggered approach in the numbers?

Yes, so generally first year generally it's higher because it's on 50% sort of a numbers.

Right sir, understood.

Yes, hi. So, coming to the SIP trends so like you mentioned we have the SIP flows are in the range of about INR 3,600 crores, INR 3,700 crores. You would have seen last quarter also in our call we had mentioned that the SIP net inflow which is coming in industry has sort of flattened. We are also sort of seeing a similar trend in our case. But along with that, what we have seen in the last say six odd months, we have started now building SIP book across few other categories, mostly in the hybrids and in the commodities funds. One or two categories like I mentioned in the last quarter call, Flexi Cap and sector funds are these two categories where we really need to build our SIP book. We are working on that very closely. Hopefully that will keep giving us slightly better net sales growth as we go ahead from here on. But the good part is the SIP book market share is more than our equity AUM market share, which is definitely the reason why our equity market share is growing. So that should be the parameter which one needs to track and we are tracking that very closely. And hopefully that should keep helping us have a stable growth in market share.

Okay sir, understood. Just to clarify, the equity net sales market share you had mentioned in your opening remarks it would be in high single -digit -- the number, correct?

Yes, if you exclude the NFOs it is in double -digit. If you include NFOs, we don't do NFOs, so it is still closer to a double-digit.

Okay. Very helpful, sir. Thank you so much and all the best.

Thank you. The next question is from the line of Mohit Mangal from Centrum. Please go ahead.

Yes, thanks for the opportunity and congratulations on a good set of numbers. My first question is on the regulation, so regulation that came with effect from 1st April, which has a potential impact of 5 basis points on equity AUM. Now that we are towards the end of April, just wanted to know what steps we have taken to mitigate the impact. And maybe how should we see that impact going forward?

So, Mohit, the impact will be in the range of around 3.5-4 basis, which we will try to minimize even though it's the first month, but it is over the period we'll try to minimize for P&L impact.

Okay, so will that be through a distribution cut or how that should be?

Yes. Yes, we are going to pass on the entire thing to the to the distributors. So, it's pass-through.

Understood, that's very helpful. Second is that the tax rate was very low in Q4, so what was the reason for that?

So, there was some release post the assessments which we have taken a reversal in the current quarter. Plus , due to this mark -to-market losses also, there is some lower taxation because the rates are slightly lower on that. So that is why there is a slightly lower taxation on that side.

Understood. My last question is towards the share of folios in the ETF space, you know, that has come down from 53% in Q4 FY25 to 45% in the current quarter. So, are we facing a lot of competition within this space or how should we look at?

So, you know, if you see the ETF, the colour of the ETF flows which are coming in various categories in the industry, the commodity ETFs have seen some higher inflows in the last six months and typically in the last three months barring say March. So , it's not competition, it is something related to -- you know, it's more related to how the market looks at multiple options when they are trying to diversify their product bouquet. We still remain highest on volumes; our volumes are the highest. Our inflows from a net inflow point of view is still higher. So, we continue to build on that perspective in the market. So , ETF is more about volumes, it is more about how many new investors are, you know, trading on the exchange and what is the impact cost we are able to deliver in the funds.

It's important to note that the overall volumes continue to grow.

Right now, this is very helpful. Thanks, and wish you all the best.

Thank you. The next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead.

Yes. Hi. Thanks for the opportunity. Just a few questions from my side. Firstly, in the as you mentioned, right, that the SIP momentum in the industry itself has kind of stabilized and post that also we've seen markets not doing great, right? So, do you see any further slowdown or how should we kind of read into this from an industry trends perspective and especially if you could highlight how are the trends different between say a do -it-yourself model versus a distributed model? That's my question number one. Question number two is, you know, last couple of quarters we've seen a very strong traction on silver and gold ETFs in terms of flows and because of which we have kind of benefited on the yield. How do you see the traction at least in the near term on these categories? And my last question will be on the expenses front, overall expenses, you know, you've been guiding about a 15% growth in overall expenses. Should we kind of stick to that and as basis points of AUM we are still higher than a few of our peers. So, do you think that we can structurally over the next couple of years, we should start tending towards that kind of a number or how should we look at expenses? Yes, those would be my questions. Thanks.

So Prayesh, the expense number I will take it and then Chatty will add on to the sales number thing. So, the expenses, yes, our guidance will still remain in the range of around 15% -16% YoY ex of ESOP. The idea is always that we should have an operating leverage and as the AUM grows, the operating leverage should kick in and should help us to reduce the basis over longer period. That will be our thought process.

Yes, on the SIPs, it's a good question. See, what we are seeing is that the Fintech platforms are definitely aiding growth of the SIP book in the industry. The client behaviour might be slightly different than what comes in from a distributor-led SIP inflow. The cycles are a bit shorter when it comes to a Fintech investors, but the good part is they are ready to commit more and hence the average ticket size is also now moving up. So that's a good trend. The other side is, when it comes to distributor -led SIPs, we are finding that these volatile conditions are leading them to educate the investor and show better retention. You know, challenges will always remain, but as we progress from here on and more SI Ps moving towards hybrid category and large cap oriented funds will lead to better retention in times to come. That's our thought process and view.

As you would have seen, gold, silver, and why only gold, silver, most of the flagship ETFs, because of our volumes, liquidity, we normally get a higher share. Last two -three years because underlying gold and silver prices increased, we definitely saw a lot of new investors coming in. Last two months, since the price has come down, we have also seen we have also seen a little bit decrease in volume. But interestingly, this Akshaya Tritiya which was there recently, out of the total traded volume on the stock exchange that day, 63% of the volume was of Nippon commodities. So, we'll continue building a strong foundation. We don't want to look at the numbers on a monthly or a weekly basis, but the key fundamental things which is basically the tracking error, the liquidity, I mean these are the two things we continue focusing on and there's a natural pull for the products and we feel whenever commodities, depending on the cycles the way they move, investors whenever they come, we remain one of the first port of call.

Also, to add, we are also seeing a lot of SIPs coming in this category. You know, that will really give stability to this category in times to come, which used to happen about five years, ten years back. I think that's a good trend. I hope we have answered your question, Prayesh.

Yes, sir.

Thank you. The next question is from the line of Shivaji Thapliyal from Yes Securities. Please go ahead.

Am I audible?

Yes, please go ahead.

Yes, thank you for the opportunity. Just a couple of questions surrounding the SIF business. One is that when is the SIF business actually starting on the ground? Is there any specific timeline for that and is there anything holding it up? That's number one. And number two, what is the outlook for this business, from a medium term, maybe couple of years perspective and also long term, five -year perspective from an AUM standpoint and also perhaps profitability? Thank you.

Let me, take this second question first, you know. This is a new business line. We somehow are convinced this can become very big. This is something what ETFs were about 10 years back. Very difficult to put a number to it 10 years back if somebody would have asked about the ETF business, they would not have been able to say how big it can become. But we are seeing this business as an important pillar in times to come, point number one. That is one of the reasons we have built up a very strong team under the leadership of industry veteran Andrew. And so, what will be the numbers, what will be the AUM we do not know, but we clearly feel this is a product and a category there is a demand for that, there is a separate market for that, is a separate niche and it requires a specialized skill set for that. And we are getting ready. So, this is an important opportunity. To your question of when do we hit the ground, while yes we have not formally launched our product, definitely there's a lot of work happening at the back end to decide and work on back testing of certain products and all that which we want to launch because no idea trying to launch a SIF which is a mutual fund plus 10% -20% variation of the mutual fund. You really want to be differentiated and add value to investors. So, to your question, we are very serious about this business because we feel it satisfies, it takes care of a separate need which some investors have, and Andrew and team are already working on it.

Thank you.

Thank you. The next question is from the line of Praveen from HSBC. Please go ahead.

Thank you and good evening. Congratulations on a good set of numbers. Two questions from my side. Firstly , about GIFT City, wanted to understand your strategy and if you have any more products planned. Second is just about the little overhang with the SEBI fine and everything, so if there is any timeline on resolution?

So, let me take the second one first, you know. At this point of time, we do not have anything new to disclose other than that has been disclosed to the stock exchanges. As and when we hear from SEBI, we'll inform, you know, through the stock exchanges. So that is point number one. Point number two on the GIFT City, we feel GIFT City is again becoming an important gateway into India. So, while there is a lot of discussion happening on money moving out of India launching products which is under LRS, but we see a bigger opportunity of money coming into India. All our roadshows that we've been doing in Japan and certain other markets, we feel today the acceptability of GIFT City is increasing and more foreign flow will come into India through GIFT City. So , we have our operations in place there, we have a complete team, and we have some more details on slide number 25.

Great, right. Thank you very much and all the best.

Thank you. The next question is from the line of Mahek from Emkay Global. Please go ahead.

Hi, thank you for the opportunity and congrats on a good set of numbers. So, I have just one question on SIP folios. So, we have seen the SIP folios have been declining on a sequential basis. So, any read-through out there and if you could just help us understand what are the SIP trends in terms of flows with respect to the month of April? And secondly, I just wanted to know your thoughts on the stickiness of SIP flows in the commodity ETF segment? Yes, these are my two questions.

So, the SIP inflows if you take Q3 and Q4, of course there is a jump in the Q4 numbers vis-à-vis Q3. Like I mentioned, you know, November, December, Jan, Feb was a bit of a tough phase for, you know, the industry as well as the inflows were lesser. But March we have seen a slightly better month. So, the trends continue to be better as we go ahead. So that helps us in net SIP growth every month which probably will start now reflecting further in the SIP book. We have seen in March our SIP book has improved. So, which is a clear indication that, you know, the investors are coming in with slightly better understanding of the volatility. So that's the first part. When it comes to SIPs in the commodity side, most of the SIPs are coming in gold and silver of course. There are SIPs which flow into other categories which have got a commodity tilt like hybrids, like Fund of Funds. So we are, we keep getting flows which are coming through the Fund of Fund also into our hybrid into our commodity fund.

Got it, sir. Thank you so much.

Thank you. The next question is from the line of Abhijeet Sakhare from Kotak Securities. Please go ahead.

Hi, good evening, everyone. My first question is for Chatterjee sir, and first of all, congratulations on the new role as well. Sir, on the SIP again, like what we've seen in the last few months is like you mentioned there was a little bit of a slowdown in net SIP inflows. Just wanted to check here whether you've seen people take money out and kind of take it out of the mutual funds itself or compared to the past you've seen people kind of staying on within the mutual fund ecosystem and moving that money into some of the safer products or let's say at least more exciting products like the commodity ETF. Just, you know, some qualitative sense on that. And secondly, in terms of the Fintech versus traditional channel, you mentioned that the Fintech channel ticket sizes have gone up. So, if you could just give some sense of what is the relative difference in terms of the Fintech SIP book versus the traditional SIP book? That's the first question, sir.

Okay. So, SIPs, you know, when it comes to SIPs which are coming through the Fintech platform, like I mentioned, they are a bit of a short cycle because they come with a past track record in perspective and if there is a volatility which is what is the fact in the market today, they tend to stop and restart. So, the good part is they do not exit the AUM, they restart a new journey and that's the reason why the SIP discontinuation number in the industry looks to be on the higher side. But when it comes to net SIP accretion every month, there is a positive accretion which is happening. When it comes to the average ATS, the ATS is sequentially moving up on the digital side. Maybe they are in the range of 60 to 70% of the regular SIP which comes in from the distribution channel, but the catch -up has been very good and very fast. So, the education drive which is happening digitally through Fintech platforms and through the asset management companies is really helping the investors to commit a slightly larger SIP amount on a monthly basis. I hope I have answered your question.

Yes, sir. And secondly, you know, question for Parag sir would be that, you know, what would be the MF revenues in the year 2026?

Percentage it will 92% approximately on the overall revenue for Q4.

92% of the overall revenues is mutual funds. Okay.

91% for FY26.

Understood. Those were my questions. Thank you.

Thank you. The next question is from the line of Divyansh Gupta from Latent Advisors. Please go ahead.

Hi sir. One simple question, if I look at the industry leader and the recent one that also IPO and looking at their operating margin versus our operating margin, is there a clear pathway in our head wherein we also can reach at those EBITDA margins or given the product mix we are likely to remain at a lower EBITDA margin business compared to the other two companies?

So, Divyansh, the basically the reason for us is that we are maintaining the EBITDA margin, that that is what we have been continuing even though there is a trajectory that the telescoping pricing will keep on dropping the overall TER, but we are we are continuing to keep the margin intact for so many years. The question or the reason is mainly the mix in AUM. We have 33% AUM mix of ETF and we are significantly higher on ETF in our overall AUM and that's why our margins are lower. But the idea is to grow the overall profitability year on year and grow as a percentage growth which is which is in line or higher than most of the industry player. So that is what the number we are looking at rather than the only bps which is which is a derived number from that. So absolute profit will be more critical for us to monitor and grow as a business.

Understood, and second question, if you can share any updates on the recent JV that we formed.

So, broadly that's for the AIF business, you know, as we have signed up a non- binding agreement, you know, and the idea is we will be launching products in AIF. The idea is we clearly see an opportunity to get a lot of overseas money and especially the alternate and the infrastructure side. Also, as far as the JV is concerned, it will also help in collaboration not only in the AIF where it will be a JV, but also wi th the mutual fund business, you know, to as in whether from a capability of international funds, ETFs, and also offshore money. So, I think it will play out. The idea is to keep getting ready as India keeps, you know, getting stronger. More foreign money will come into India and I think building capabilities access, we were always very strong in Japan. So now this JV gives us an access to Europe.

Got it, got it. Understood. And just one last question. Like in India we have feeder funds going into US, right? So, let's say there will be a Vanguard fund or a JP Morgan fund. And not specifically related to Nippon, but generally as an industry level, is there anything moving towards making a fund of fund kind of structure being made available in India so that actually the retail money can come in because I understand Gift City is there but the ticket size for a Gift City will also be higher, but a feeder fund can actually drive much more retail AUM. So, is there any work at industry level to create feeder funds coming into India?

I will not be able to comment on behalf of the industry. As a company our focus is always keeping investor in mind. As and when we feel there is an appetite and there's a need, we will be open to launch it. And to your earlier question, having DWS with us, you know, and DWS is one of the largest international players both in not also in ETF space, but also passives, you know. So, there could be I do not want to say it will happen but depending as and when there's a need from the investors and the demand from the investors, we feel we are in a strong position to launch products like these.

Got it, got it. Understood. Thank you.

Thank you. That was the last question for today. I now hand the conference over to the management for closing comments.

Okay, thank you all for taking out time to join us on the call today. If you have any other further queries, we will be happy to address the same post the call. Thank you.

Thank you very much. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you all for joining us today and you may now disconnect your lines.