Summary
Canara Robeco Asset Management Company Ltd. - Q3 FY2026 Earnings Call Summary Tuesday, January 27, 2026, 11:00 AM IST
Event Participants
Executives 3 Ashwin Purohit (CFO), Atit Turakhiya (Head of Corporate Development and MIS), Rajnish Narula (MD & CEO)
Analysts 6 Ankit Dharamshi (RNM Capital Trust), Adarsh (Negen Capital), Prayesh Jain (Motilal Oswal Financial Services), Rajeev Rupani (Individual Investor), Saket Mehrotra (Tusk Investments), Sucrit D. Patil (Eyesight Fintrade Private Limited)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Closing AUM | ₹1.2 lakh crores | +12% YoY; supported by 50 lakh investor folios. |
| Quarterly Average AUM (QAAUM) | ₹1.22 lakh crores | +13% YoY; reflects disciplined investment philosophy and investor trust. |
| Revenue from Operations (9M) | ₹310.7 crores | +18% YoY; driven by AUM growth and equity-heavy mix. |
| Adjusted PBT (9M) | ₹226.5 crores | +14% YoY; adjusted for ₹10.15 crore one-time employee benefit/IPO expenses. |
| Adjusted PAT (9M) | ₹170 crores | +14% YoY; reported PAT stood at ₹162.4 crores (+9% YoY). |
| Equity AUM Mix | 90% | Stable; concentration in equity-oriented assets remains a core strategy. |
| Monthly SIP/STP Flows | ₹755 crores | Derived from 21 lakh active SIP accounts despite recent industry volatility. |
| Equity Yield | 35-36 bps | Core margin driver; management focus remains on AUM scalability over yield expansion. |
| Cost-to-Income Ratio | 38% | Management targets a steady-state ratio around 40%. |
| B30 Monthly Avg AUM | ₹289 crores | Increased from ₹261 crores YoY; reflects expanding reach in emerging India. |
Geographic & Segment Commentary
- Retail & B30 Presence: The company expanded its physical footprint to 29 branches, adding 9 branches over the last two years. Management is leveraging the Canara Bank brand strength, particularly in South India, to drive B30 (Beyond Top 30 cities) growth.
- Distribution Network: Currently operates with 55,191 empanelled partners. Strategic focus is shifting toward increasing the “wallet share” from existing meaningful distributors alongside new empanelment.
- Investor Composition: Individual investors contribute 87% of assets, while institutional investors account for 13%. This high retail mix provides a stable base for the 90% equity-heavy AUM.
Company-Specific & Strategic Commentary
- Product Strategy: Management adheres to a “boutique” philosophy, launching only 1-2 products per year rather than being a “supermarket.” Current focus is on filling product gaps in the mutual fund space before evaluating AIFs, GIFT City, or passive offerings.
- SIP Initiatives: A new internal strategy for SIP growth is under investment, following the launch of “Goal SIP” six months ago. Results from these technology-led SIP strategies are expected within 6-12 months.
- Digital Transformation: Increasing adoption of digital platforms is being used to drive operational efficiency and direct investor engagement. Technology spend is being calibrated to ensure returns are justified relative to the 40% cost-to-income target.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| AUM Growth | 20% Compounded | Management targets outpacing industry growth through equity focus and SIP strategies. |
| Dividend Payout | 40% - 50% of PAT | Transitioning to a PAT-linked payout policy for new shareholders while maintaining balance sheet strength. |
| Branch Expansion | 3 - 5 branches per year | Aimed at supporting distributors in high-AUM potential cities. |
| Operating Margins | ~40% Cost-to-Income | Guidance to maintain this range despite increasing technology and compliance costs. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory Changes | SEBI’s restructuring of TER (effective April 1) and removal of 5 bps additional charges pose industry-wide margin pressure. Management intends to balance impact between the AMC and distributors. |
| Market Volatility | Volatility has led to increased SIP cancellations and “pauses,” particularly among direct/digital investors lacking advisor guidance. |
| Cost Headwinds | The new labor code impact on gratuity (calculated on 50% of basic) created a one-time ₹10.15 crore hit and will increase structural employee costs. |
Q&A Highlights
Asset Quality & SIP Trends
- Question: Why has the number of folios and outstanding SIP accounts fallen QoQ? (Adarsh)
- Answer: It is an industry-wide trend linked to market volatility. Digital investors, lacking advisors, tend to cancel or pause SIPs more frequently. Per definition, pausing for two cycles is treated as a cancellation. (Rajnish Narula)
Yields & Margins
- Question: Can you explain the sequential improvement in yields? (Prayesh Jain)
- Answer: Overall yields are 33-34 bps (Equity 35-36; Debt 28-29). Improvement resulted from a combination of structure optimization and rationalization of commissions. (Rajnish Narula)
One-time Expenses
- Question: What caused the spike in employee benefit expenses? (Adarsh)
- Answer: A one-time ₹10.15 crore charge for new labor code compliance (gratuity recalibration) and IPO-related expenses. (Ashwin Purohit)
Future Payouts
- Question: How will the dividend payout policy evolve post-listing? (Saket Mehrotra)
- Answer: We are moving to a PAT-linked policy, targeting 40-50% for the next couple of years while ensuring the balance sheet remains strong for one-off events. (Rajnish Narula)
Key Takeaway
Canara Robeco delivered a resilient Q3 FY26, with QAAUM growing 13% YoY to ₹1.22 lakh crores, anchored by a high equity mix of 90%. While reported PAT was impacted by a one-time ₹10.15 crore labor law and IPO-related charge, adjusted PAT grew by 14% YoY, reflecting healthy core profitability. The company is doubling down on its “boutique” equity-focused identity, intentionally avoiding the “supermarket” model to maintain specialized performance. Strategically, it is expanding its physical footprint (29 branches) and investing in new SIP-specific growth strategies to counter industry-wide volatility in retail flows. Management remains committed to a 20% compounded AUM growth target and a 40-50% dividend payout ratio. Future performance remains contingent on the clinical execution of ongoing NFO launches and navigating SEBI’s upcoming TER restructuring effective April 2026.
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