Costs outpace revenue as ABSL AMC margin slide extends
YoY profit fell 8.44% as expenses rose 20.71%; operating margin was 7.49 percentage points below the 16-peer sector median.
Filed 21 Oct 2026, 14:08 IST · Aditya Birla Sun Life AMC Ltd (ABSLAMC)
Key takeaways
- Revenue rose +4.88% YoY, but expenses grew +20.71%, cutting operating margin by 5.85 percentage points to 55.40%.
- Net profit fell -8.44% YoY to Rs 220.98 cr as other income contributed 14.31% of pre-tax profit and the tax rate rose 1.86 percentage points.
- Operating margin was 7.49 percentage points below the 62.89% median for 16 reported Financial Services peers.
Price around the results
Revenue growth did not translate into profit growth
Consolidated revenue grew +4.88% YoY and +4.50% QoQ, but operating profit fell -5.14% YoY as the cost base expanded faster. Net profit declined -8.44% YoY and -28.60% QoQ to Rs 220.98 cr.
Expense growth and lower other income weighed on earnings
Year-on-year expenses rose +20.71% against revenue growth of +4.88%, narrowing operating margin by 5.85 percentage points; sequentially, expenses also grew faster than revenue and reduced margin by 0.25 percentage points. Other income fell -73.90% QoQ, helping drive the -27.06% decline in pre-tax profit, while the tax rate increased 1.61 percentage points QoQ and 1.86 percentage points YoY. Other income still accounted for 14.31% of pre-tax profit in the quarter.
Margin has declined for four consecutive quarters
Operating margin has fallen from 61.25% in Q2FY26 to 55.40% in Q2FY27 across four consecutive quarterly declines. ABSL AMC's margin was 7.49 percentage points below the 62.89% median of 16 Financial Services peers that had reported, placing it fifth from the bottom.
Management points to distribution and product expansion
Management said the company plans to scale its retail franchise and diversify its product offerings, and reported that it empanelled more than 3,800 new MFDs in H1FY27. The company said it registered around 705,000 new SIPs, including STP, during the quarter, while servicing more than 96,000 MFDs, 360 national distributors and 90 banks through more than 310 locations. Management also said fundraising was under way for ABSL Real Estate Credit Opportunities Fund Series II and noted that industry net sales moderated in Q2FY27.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹484 cr | ₹463 cr | +4.50% | +4.88% |
| Other income | ₹42 cr | ₹162 cr | -73.90% | -6.14% |
| Expenses | ₹216 cr | ₹205 cr | +5.08% | +20.71% |
| Operating profit | ₹268 cr | ₹258 cr | +4.04% | -5.14% |
| Operating margin (%) | 55.40% | 55.65% | — | — |
| Interest | ₹1 cr | ₹1 cr | +0.88% | -10.24% |
| Depreciation | ₹13 cr | ₹13 cr | +2.18% | +20.96% |
| Profit before tax | ₹296 cr | ₹406 cr | -27.06% | -6.16% |
| Tax | ₹75 cr | ₹97 cr | -22.13% | +1.27% |
| Net profit | ₹221 cr | ₹309 cr | -28.60% | -8.44% |
| EPS (₹) | ₹7.64 | ₹10.72 | -28.73% | -8.61% |
Operating margin of 55.40% compares with a Financial Services sector median of 62.89% across 16 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.78% | -4.23% |
Volume on the results session was 1.79× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The company registered around 705,000 new SIPs, including STP, during the quarter ending September 30, 2026.
- The company serviced more than 96,000 KYD-compliant MFDs, 360+ national distributors and 90+ banks through 310+ locations.
Guidance & outlook
- The company plans to scale its retail franchise and diversify its product offerings.
Expansion
- The company empaneled more than 3,800 new MFDs in the first half of FY27.
- The company is raising funds for ABSL Real Estate Credit Opportunities Fund Series II.
New initiatives
- The company conducted five Yashasvi batches at the NISM campus for women MFDs and their spouses.
Problems & risks
- The industry witnessed moderated overall net sales in Q2 FY27.
What to watch
- Whether operating margin stabilises above 55.40% after four consecutive quarterly declines.
- Whether expenses grow more slowly than revenue after rising +20.71% YoY against revenue growth of +4.88%.
- The share of pre-tax profit coming from other income after it stood at 14.31% in Q2FY27.