Aditya Birla Sun Life Amc Ltd (NSE: ABSLAMC) Q2 2025 Earnings Call dated Oct. 29, 2024
Corporate Participants:
A. Balasubramanian — Managing Director & Chief Executive Officer
Prakash Bhogale — Head, Investor Relations
Analysts:
Jignesh Shial — Analyst
Dipanjan Ghosh — Analyst
Lalit Deo — Analyst
Abhijeet Sakhare — Analyst
Mohit Mangal — Analyst
Bhavin Pande — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Aditya Birla Sun Life Asset Management Q2 FY ’25 Earnings Conference Call hosted by Incred Equities. [Operator Instructions] Please note that this conference call is being recorded.
I now hand the conference over to Mr. Jignesh Shial from Incred Equities. Thank you, and over to you, sir.
Jignesh Shial — Analyst
Yes. Thank you, Siddhant, and good evening, everyone.
On behalf of Incred Equities, I welcome all to Aditya Birla Sun Life AMC Q2 FY ’25 Earnings Conference Call. We have along with us Mr. A. Balasubramanian, Managing Director and CEO; and Mr. Prakash Bhogale, Head, Investor Relations. We are thankful to the management for allowing us this opportunity.
I would now like to hand it over to Mr. A. Balasubramanian, Managing Director and CEO of Aditya Birla Sun Life AMC, for his opening remarks. Over to you, sir.
A. Balasubramanian — Managing Director & Chief Executive Officer
Yes. Thank you, Jignesh, for the introduction, and good evening, everyone, and thank you for joining us on today’s investor call.
I trust you all have had the chance to review our earnings presentation, which is available on both the stock exchanges website and our own website.
Let me begin with the economic outlook and update on the mutual fund industry. The global economy continues to be resilient and is expected to grow by healthy 3% in 2024. The global inflation has moderated in major economies, leading to the easing of monetary policies. We believe that this trend of easing of monetary policy will continue as we move forward, embraced by most Sun bankers. In India, the macroeconomic outlook remains solid, with the consensus expectation of approximately 7% growth in FY ’25. Recent GDP data indicates a pickup in private consumption, supported by pickup in agri economy. India continues to be the fastest-growing major economy in the world, supported by progressive economic policies and healthy macroeconomic stability parameters.
The abundant and well-distributed monsoon rainfall has fostered a positive outlook for agriculture output, enhancing rural income and stabilizing food inflation, which will contribute to a more resilient economy. With overall inflation momentum moderating, the RBI Monetary Policy Committee recently changed its stance from withdrawal of accommodation to neutral, opening the door for a potential rate cut in the second half of the current fiscal year. The government fiscal position remains robust, supported by strong revenue receipts. The external account continues to be stable, marked by a low current account deficit and foreign exchange reserves scaling new heights.
The Indian market for the quarter ended September ’24 was marked by a period of volatility and uncertainty. The resurgence of China with the meaningful easing of policies has further added to the volatility to Indian market. While we have witnessed the FI flows being negative, increased participation from domestic institution investors and retail investors has brought in the much needed stability in the market with the market moving in a narrow range. At the same time, we’re ongoing with the current quarter corporate earnings. We might see a slight moderation overall growth expectations. Therefore, within expectation of return in the time to come.
With respect to the mutual fund industry, as of 30 September 2024, the mutual fund industry quarter average AUM reached INR66.21 lakh crores as compared to INR46.98 lakh crores as of 30 September 2023, growing 41% on a year-on-year basis. During the quarter, the mutual fund industry witnessed net equity sales, excluding index funds of around INR1,43,000 crores through a new fund offerings and inflows in existing funds. The total NFO collection in equity funds, in fact, were around INR26,800 crores, majorly coming from sectoral and thematic funds. The industry SIP flows grew by 53% year-on-year from around INR16,000 crores in September 2023 to INR24,500 crores in September 2024.
The total number of overall mutual fund portfolios stood at around 21 crores with a year-on-year increase of 34%. The individual average AUM grew by 50% year-on-year from 28.1 lakh crores to 42.1 lakh crores and contributed 62% of the total AUM. The Tier 3 cities with an average AUM of INR12.59 lakh crores account for 19% of the total AUM. At Aditya Birla Sun Life AMC, our overall assets under management including alternate assets reached INR4 lakh crores, reflecting 20% year-on-year growth. In fact, we just crossed INR4 lakh crores first time ever in the history of the ABSL mutual fund. Our mutual fund quarterly average AUM reached INR3.83 lakh crores, growing 23% year-on-year.
The quarterly equity average AUM stood at INR1.81 lakh crores, growing by 39% year-on-year. The SIP booked in the quarter crossed INR1,400 crores as a 47% year-on-year increase from INR968 crores in September 2023 to INR1,425 crores in October 2024. We also added around 11.55 lakh new SIPs, 5x increase compared to the previous year. I’m also happy to share that our total investors folios have crossed 1 crores, with around 19 lakh new folios being added during the last quarter.
On the investment side, during the quarter, we have witnessed an uptick in the performance of our equity funds, and number of funds are bidding the respective benchmarks and also peer averages in the respective categories. This has, in fact, created a positive perception among our distribution partners and investors at large, leading to an increase in overall Net Promoter Scores. We are expanding our fund management team, which will enhance our capability of managing core equity funds effectively further.
I’d also like to mention that the increased level of engagement at a ground level, supported by return of strong investment performance is helping us narrowing the dip in the equity market share on a quarter-on-quarter basis. On the fixed income front, we continue to deliver robust returns across most categories and be the preferred choice of investors. We have taken some steps in offering products to meet the investors’ expectation by planning to launch a number of target maturity funds as well as promote our duration funds. As interest rates start falling, duration funds also, we believe, will start picking up. As we have been highlighting about our commitment to building our alternate assets and passive business, we are making good progress on this segment of our business vertical.
The alternate segment, PMS and AIF remains a key focus. Our PMS/AIF assets grew by 66% from INR2,300 crores to INR3,900 crores in the current quarter. Our offshore assets also had witnessed some flows during the current quarter, which grew by about 31% from INR9,700 crores to INR12,700 crores. Our GIFT City operations, the gateway for inward and outward remittances has also gathered momentum. We’ll be closing soon our first emerging market products under LRS scheme by February, wherein we already have collected USD50 million. The ESG fund created for inward for remittance, we got a first collection of USD25 million and more fundraising is currently underway. On a similar line, we also created the ABSL Flexicap fund for inward remittance for NRI investors.
Further, we also taken approval from the GIFT City authorities to launch yet another product called the ABSL Global Blue Chip Fund under the LRS schemes, ODI and OPI schemes. During the quarter, we also launched the performing credit opportunity funds under AIF. In order to build phase in this category, both from domestic and global investors, we also committed our own capital to support growth of this fund out of your treasury portfolio. On this passive front, as of 30 September 2024, our assets totaled to approximately 37 crores. Our customer base has also grown over 9.5 lakh folios and we also have a diverse product portfolio of over 47 products. We’re also planning to launch new funds in the coming quarters to expand our passive offering for investors.
I’m also happy to share that during the quarter, we also won the ESIP mandate under the advisory route and documentation under progress to get the actual funds into our account so that we can start managing the portfolio effectively very soon. The current quarter on the people front, we have made a few changes to further strengthen our leadership team to drive some of our core support functions for growing our business. We’ve added a new Head of Digital and Data Analytics, a new Head of Marketing. And this strategic addition will drive innovation and enhance our customer engagement and service and helping us expand the customer wallet share as well as the mind share, ensuring that we stay ahead in a rapidly evolving market.
Moving on to the financial for the quarter. Our total revenue is about INR520 crores versus INR391 crores in the Q2 of FY ’24, up 33% year-on-year. Our profit after tax is at INR242 crores versus INR178 crores in Q2 FY ’24, up 36% year-on-year. On the first half FY ’25, our total revenue is about INR1,001 crores, up by 28% year-over-year, and profit after tax was at INR478 crores, up 32% year-on-year.
With this, I would like to conclude and open the floor for any questions that you may have. I’ll be joined by Prakash to answer any of the questions that you may have related to the financials and other numbers that you may have. Thank you.
Questions and Answers:
Operator
Thank you, sir. [Operator Instructions] our first question is from the line of Dipanjan Ghosh from Citi. Please go ahead.
Dipanjan Ghosh
Hi sir, good evening. So first, a few data-keeping questions. One is if you can give the overall employees for the quarter as in the period ending? Second is SIP flows for the quarter? And third is the revenue from the non-MF businesses since they have been doing quite well? And apart from the data-keeping questions, I have 2 more questions, which is if I look at some of your peers, especially some of the leading ones, they have undergone certain changes or are undergoing certain changes in terms of the payout structure to the distributors, either on the back book or an incremental close in certain cases. So I just wanted to understand, have you taken any such exercise or envision taking any such exercise in the near future? And my second question is on the non-MF businesses, what sort of incremental investments be it on the investment team, sales team or other teams that one should kind of factor in going ahead?
A. Balasubramanian
Sure. So on the overall employees, including approval — Prakash will answer this question in a while. In terms of SIPs, we have about INR1,423 crores inflow per month. That’s something we ended in the month of September.
With respect to the alternate assets revenue, how much is increase?
Prakash Bhogale
So Dipanjan, I’ll answer the data-keeping questions which you have asked. So number of employees as of September is around 1,552, our SIP flow for the quarter is around INR1,171 crores. And the last question which you asked is alternate asset income for the quarter, it’s in the range of around INR44 crores.
Dipanjan Ghosh
Okay. So SIP flow was INR1,071 crores or INR1,171 crores?
Prakash Bhogale
INR4,171 crores. You asked for quarter?
Dipanjan Ghosh
Yes, INR4,171 crores. Okay.
A. Balasubramanian
For the full quarter. Full quarter. Yes. With respect to alternate asset revenue, what is the incremental revenue?
Prakash Bhogale
It’s around INR25 crores to INR26 crores incremental revenue we have got in this quarter because our AUM has increased in the alternate space, mainly in the PMS and AIF segment.
A. Balasubramanian
Yes. Okay. With respect to the question that you asked about commission structure, which I think you referred about competition. See, in our case, we keep evaluating it on an ongoing basis. Wherever, we need to moderate keeping in mind the growth expectation of the asset, I think we have 2 tasks in our hands. One is growing the pie continuously, and that’s one of our high priority in terms of increasing our market share as well as increasing our overall equity assets and management. And given also the fact that, that we have been increasing — we’re working towards improving overall employee productivity by increasing the sales. Therefore, keeping this in mind, whenever we feel the appropriate time for us to revisit this, and looking at overall the corporate landscape, we will consider the suitable steps at that point of time.
As it stands today, right now, we have not thought about anything of that kind of reduction. But anyway, there’s an ongoing exercise, we keep doing it looking at the overall profitability contribution combined with the growth expectation that we have. With respect to the non-mutual fund, the sales team, of course, with respect to the overall people management as far as investment concern, I’ve been highlighting for quite some time, the changes that we have made. In fact, the last addition that we have done getting 1 person on board with real good experience in managing mid and small cap segment of the market. So he’s coming on board by the middle of November. With that, we’ll have complete the addition of the investment concern.
Given the fact that SEBI also has given the new idea of — the new fund category we have created using the derivatives will build some capability, getting some talent pull on that space if at all, we have to manage some assets in the same space, we’ll have some readymade talent pool available for that space. The other areas where we’ll further beef up on the alternate phase, of course, with respect to selling alternate business as a key sales people, we have roughly about some of our team across the country to coordinate their sales force. We will probably look at increasing that by whenever there’s a need.
At the same time, direct sales team, we have roughly about 45 people currently. And we keep thinking about that number can actually go up a little higher. This year, we have, of course, accounted for about 50 people addition that we have talked about, out of which we currently have 45 people. And if we think that segment, we’ll have to further improve further, we’ll probably beef up the team depending upon which part of the year we must do it.
And lastly, of course, to bring the overall alternate sales to next level, we also, of course, evaluating person who could help us in-build the alternate business not just only in domestic market, including reaching out to the global investors, given the fact that we are also looking at seeing some kind of momentum coming in our offshore business. We’ll probably look at a talent pool who can actually work both domestic investors, the institutional investors and family offices as well as global investors. That’s something we are in the process of finalizing somebody. And they’ll hopefully should come on board by Jan, February timeline.
Dipanjan Ghosh
Got it. Sir, just 1 follow-up. If I look at your SIP discontinuance rate, that seems to have kind of gone up meaningfully whereas your overall quarter-wise SIP flows has been broadly stable or marginally improving. How should one really reconcile this?
A. Balasubramanian
Yes. I think the SIP cancellation generally, what happens is, generally in the thumb rule for the industry is roughly about 40% to 50% kind of cancellation happened. Of course, also gets reregistered. The way I look at is, the registration number, I think if you look at our presentation, the SIP registration numbers from 2.33 has gone about — somewhere about 11.13 number you see. That’s one way to measure the success. I keep looking at the new customer addition should actually help in improving the overall base. The 19 lakh new customer folio that we’ve added is all actually with the intention to increase the overall gross pie. While we have a great opportunity to retain customers, we have redemption stopping, et cetera.
We actually formed a small set of team given the fact that we have strengthened our analytical capability, wherein we can create some kind of predictive model basis, which we can withhold the customers before they canceling the SIPs, which we call it a win-back. We have put a separate team of people to drive the win-back initiatives as well as the people who are looking at market volatility, they redeeming unknowingly. Therefore, how to actually reach those customers instantaneously so that before the money can get credited into account, we can highlight to the investors how important for them to stay invested for long term and how important to continue SIPs.
Therefore, that’s something we are driving into the — service to sales RM activity that we have as well as the data analytic person who have come on board, he of course, came on board from one of our ABC unit only and who understands the entire customer behavior using data analytics. I think he is also, of course, going to help us in terms of improving the return ratio by way of win-back strategy. So that’s the way we are looking at it. Of course, broadly, the way I look at it is, the top line number should keep improving, that’s one of our task. At the same time, returning of assets, both should help simultaneously if we do it effectively, should help in improving the overall momentum.
Prakash Bhogale
Dipanjan, only 1 clarification. The alternate assets, which I had told you INR34 crores, which was increased by around — which was INR21 crores last quarter same year.
Dipanjan Ghosh
Yes. So INR21 crores in 2Q ’24, and this compares with — or 1H, so you’re telling 2Q or 1H?
Prakash Bhogale
No. I’m telling last year same quarter is INR21 crores. So in the current quarter, it’s INR34 crores.
Dipanjan Ghosh
Okay. So in 1Q ’25 will be around the same number as in the previous quarter?
Prakash Bhogale
Yes, it is around INR30 crores, INR29.9 crores.
Dipanjan Ghosh
Okay, thank you.
Operator
Thank you. Our next question is from the line of Lalit Deo from Equirus Securities. Please go ahead.
Lalit Deo
Yes. Hi sir, good evening. So just 2 questions. So if we just try to exclude the revenues from the non-MF business, then probably our…
Operator
Sorry to interrupt Mr. Lalit, if you can speak a bit louder?
Lalit Deo
Yes. Is this — am I audible?
Operator
Yes, you are audible now. Yes. Please go ahead.
Lalit Deo
So I just wanted to ask like if we exclude the revenues from the non-MF business, then our yield — broadly, our yields have remained stable, and at the same time, our share of equity AUM has slightly inched up. So just wanted to understand the segment-wise revenue wheels over there?
A. Balasubramanian
Sure. I’ll ask Prakash to answer this question.
Prakash Bhogale
So Lalit, as you rightly pointed out, because of the increase in our mix, our yield has remained stable compared to last quarter. So you can see in our presentation, our mix has increased from around 42% to 47%. This is one of the reasons for maintaining the margin, even though the size in the equity assets has increased. So on the asset class-wise yield, in the case of equity, it is around 67 basis points. On the debt, it is around 24 to 25 basis points. On liquid, around 12 to 13 basis points.
Lalit Deo
Sure. Sir, second question was that on — so like in the SIP flows, so while the industry has grown at a much faster pace and like we have grown on an absolute basis, but in terms of market share, we have lost some market share over there. And at the same time, where we are seeing some improvement in the scheme performance. So what would be the reasons for us get a slower growth as compared to the industry growth in the SIP flows?
A. Balasubramanian
Yes. I think if you divide the SIP flows into 2 parts, one is the online digital platform sales, it currently contributes about 50% to 55% of the sales come from the segment. The traditional channels other than direct contributes roughly about 35%. In fact, the traditional channel other than MFDs, there has been a bit of slowdown in terms of the SIP contribution, large contribution coming from the online channel — customer additions. As you know, online channels comes in on the basis of the top 3 performance among the competition. In fact, we have seen some of our funds which are performing well, being part of the online channels, wherein we have seen good momentum coming in, both in terms of SIP, new customer addition as well as the overall number of folios rising in that space.
Of course, they don’t contribute to the significant in terms of value. Most of the value come from both the direct and — as well as the traditional channel. I think that is one of the reasons why you would have seen our absolute number has been rising, overall folio number has been pricing, but the rate of growth in terms of value compared to the end of Q3, marginally lower. But the way we look at it is the — while of course, that’s the case so far, we also, of course, had a separate target for each of the channels to measure the success of our sales productivity.
As therefore, focused on average ticket sales coming from the traditional channel, which is, I mean, of course, the key. I mean the performance improvement that is being — which I mentioned about and general perception is also moving quite significantly on the upside. It should also lead to — should get a sufficient backup from the SIP ticket size is also rising. Of course, in terms of count is one part of it. I think ticket size also should come — may have increased participation coming from the traditional channel.
Lalit Deo
Right, sir. So just 1 clarification, like when we say that 50% to 55% comes from the online channels, is it for us? Or is it for the overall industry are you talking over here?
A. Balasubramanian
It is for the industry as well. Industry also is more or less similar numbers. I think for us also would be roughly about 45% to 50% will come from the online channel. And it can gain momentum. In terms of giving new customer addition can definitely give you a momentum. But of course, they all go by the whole industry, there so many funds are there, they’ll select only top 3, top 4 on a base of 1 year, 3 years’ performance. Some will get, some will not get. If you look at the — industry-wide, if you look at numbers, there has been a significant growth is coming from non-top 10 players as well. And this is a function of these dynamics.
Lalit Deo
Right, sir. And just 2 data-keeping questions. One, could you give us the SIP AUM as of September ’24? And just wanted to understand, like in this quarter, we have seen some increase in our other expenditures, other opex. So any reasons — any particular reason for that? That would be helpful.
Prakash Bhogale
SIP AUM is INR83,900 crores as of September ’24. And increase in the other opex is mainly on account of the software charges, the database research. There are some expenses on the CSR and there is some increase in traveling costs. So these are the main heads wherein the cost has increased.
Lalit Deo
Sure. Thank you.
Operator
Thank you. [Operator Instructions] Our next question is from the line of Abhijeet Sakhare from Kotak Securities. Please go ahead.
Abhijeet Sakhare
Yes. Hi, good afternoon, everyone. So my question is, again, coming back to flows, which funds are leading the revival inflows for us if you could name top 3, 4 funds, which are doing well last few months?
A. Balasubramanian
Yes, sure. So, one, we are seeing increased traction in some of our key main funds, purely on the back of the — one is performance improvement as well as general acceptance of these funds have got over the long years of track record, which is the frontline equity, flexi cap fund. Multi asset location fund, we are getting flows. Of course, we — until last month, we used to get good flows from thematic funds. Especially in the PSU funds, we used to get really good flows until last month. Even this month, too, we have seen inflows, but there is a margin reduction given the fact that segment of the market has seen some bit of hit.
We’re also seeing some flows coming on the — coming on the balance advantage fund, given the fact that’s one segment where we are seeing increased traction given the market volatility. And of course, RM fund continues to see inflows are also counted as an equity that continues to see inflows. Among the thematic category, of course, the quant fund, which we launched this recently, we continue to see some kind of flows coming in. As well as we see flows coming in the thematic fund which we launched about a few months back — about a year back, which is the transportation logistics fund, also seen flows.
Abhijeet Sakhare
Got it, sir. Thank you so much. And again, from a channel point of view, clearly direct will be most responsive to start with. But are you already seeing a response from some of the traditional channels like MFDs or IFAs or that is still to come through?
A. Balasubramanian
MFD, I’m seeing improvement. That I mentioned about the perception on performance improvement, which I mentioned about — largely is coming from the distributors’ voice across the country, wherever the team has been traveling, and myself have been traveling. At least there is an increased acceptance and recognition. It’s also leading to the activation number which I talked about. The activation number that we are talking about is also a reflection of participation coming from MFD. That’s a traditional channel. They are close to us. They have a lot of loyal distribution community with whom we work with in multiple areas and improving their knowledge levels, work closely with them in helping them improving overall businesses. That’s something we are seeing an uptick.
Banking channel. Of course, one of the banking channel, which is traditionally large bank for us. Of course, we go by 1 or 2 products as part of the accommodation. While some of the products are on hold, but one good thing that I’m seeing, some of the product which are already part of recommendation in some of these channels versus our product, we’re already seeing some of our products are doing better than the products that are the part of the recommendations in these channels. And hopefully, as we review and revise, and as we starting seeing our product getting incorporated at the cost of somebody else moving out, should actually lead to increase in contribution coming from these large banking channel.
Abhijeet Sakhare
And sir, again, last one clarification on the banking channel. Is it true that, that channel actually puts much more weightage to the 3-year returns? Or 1 year strong performance is good enough to drive flows there as well?
A. Balasubramanian
See, we look at both. They give a weightage for 1-year improvement performance and also give weightage for — anyway CPR ranking is done well, 20% weightage for the 1-year performance and balance is given for 3-year performance. The same model they run. But the moment they see a similar on the same lines, some of the funds are already part of recommendation has to move out, then they bring in new funds. That’s traditionally have seen them doing this. And of course, definitely, they recognize the improvement on the performance in the 1-year and 18 months period. It helps them to put on the top of the consultation to get them on board faster.
Abhijeet Sakhare
Got it, sir. Thank you so much.
Operator
Thank you. [Operator Instructions] Our next question is from Mohit from Centrum India. Please go ahead.
Mohit Mangal
Yes. Hi, thanks for the opportunity. My first question is that what are the NFOs that we are targeting over the next 2 to 3 quarters? Hello?
A. Balasubramanian
We have taken approval from SEBI, 1 diversified equity fund with a thematic nature. That’s something we will plan to launch sometimes this current festive season. Second, on the passive side, we also taken approval for launching 1 fund again on the thematic category — with a reasonably — close to about — the sector that drives the Indian economy. That is something we have taken approval. And these 2 funds we have as part of the pipeline. On the fixed income side, of course, we have planned launch of a few products, as I mentioned in my opening remarks, target maturity fund, series of funds that we have planned that they can grab some bit of market as the fixed income goes.
On the GIFT City side, we have, of course, taken approval from — we already have a product in place for no remittance, which is a flexi cap fund that will fit into my existing funds. That’s something we have already set it up. We should see some of our momentum coming in that phase, though the medium ticket size is still higher, is not meant for retail. It’s actually more than $100,000, somebody can put in from overseas. That’s something we have set it up.
We also have plan to launch 1 fund for outward remittance, which I just mentioned about from India to overseas under the LRS, ODI and OPI. That’s something also we have set it up. And hopefully, that fund, we should launch in sometime in the month of Jan, February, upon closing the existing funds, which is coming from a closure in the month of February. But these are the plans that we have. In addition to that, on the AIF side, we are in the process of fundraising on the credit opportunities fund, private credit opportunities fund, which I again, mentioned about in my remarks.
Mohit Mangal
Okay. That’s great. And then basically, any idea as to how this NFO that — the size of NFOs maybe on the more passive as well as on the fixed income and equity? Any indication on the size of that?
A. Balasubramanian
Of course, too early to give you the size, Mohit, given the fact that I think we have the play it as we start launching these funds. But definitely, our endeavor would be to create the high level of engagement that we have at the ground level, add to the overall outcome of these funds in terms of collections.
Mohit Mangal
All right. Thank you, and wish you all the best.
Operator
Thank you. [Operator Instructions] Our next question is from the line of Bhavin Pande from Athena Investments. Please go ahead.
Bhavin Pande
Hi, would it be possible to quantify in terms of the percentage of AUM? Or how the strategies are behaving? And in bucket, how they are outperforming their…
Operator
Sorry to interrupt Mr. Bhavin, your voice is a bit muffled. If you can please repeat your question.
Bhavin Pande
Yes, sure. Am I clear now?
Operator
Yes. Please go ahead.
Bhavin Pande
Yes. It would be great if you could shed some light on how funds as a percentage of AUM are outperforming vis-a -vis the benchmarks and also in terms of bucket for 3 months, 6 months and 1 year?
A. Balasubramanian
Sure. So I think Bhavin, the way we keep looking, of course, on a quarterly basis, and we keep reviewing it. Roughly about 60% to 65% of our funds today not only beating the benchmark, we also doing — performing better than the peer average in the respective category. If we look at peer average, both the funds that are comparable to us. Second, we also have to look at the broader — all funds are put together. And both the categories and peer average of performance it’s roughly about 65% of our assets. The other good thing is the funds generally since we have many funds that we are managing it, the funds, which, of course, sometimes for a variety of reasons, could be in the bottom of the quartile.
In fact, we don’t have any funds in the bottom of the quartile, which also change in the overall improvement that I’m seeing. The number which I’m saying is it is both on a 6-month and 1-year basis. In fact, even on a 3-year basis, the number of funds which is outperforming the index is almost now coming close to about 45% to 50% on a 3-year basis also, reflecting on the overall improvement. I think as I always believe that as we start improving in a very short-term performance, moving from 3 months to 6 months, 6 months to 9 months, 9 months to 1 year, and 1 to 1.5 years, naturally, it actually pulls up the long-term performance as well. That’s why we are seeing it happening.
Bhavin Pande
Okay. And sir, I think you shed some light a bit on the digital channel mix. But if you look at the participants across industry, everybody has seen robust flows contribution via digital channels. So when do you think our digital channels would start picking up and would start contributing meaningfully?
A. Balasubramanian
See, we already started to see the momentum in the last 2 quarters. If you have listened to my earlier — some of my narratives that I have given. In the last 6 to 8 months that we have seen started from the March quarter ending, and we have seen it in starting in June as well as the current quarter. In terms of increase the participation coming from our digital channel, both in terms of the folio getting added as well as new customer addition. And as I mentioned, the current improvement of performance that we are seeing in the key categories, we would also, of course, take enough steps to ensure these products are being highlighted in this platform, and therefore, it comes as a part of the recommendation list.
Therefore, we get some incremental AUM from this segment going forward in some of the products that we are confident of getting more money. But we’re already seeing that the engagement that we have had with the digital channel partners have been reflecting in terms of momentum. In fact, the last few quarters improved traction that we are seeing on the SIPs. It is a combination of digital channel as well as MFD channel.
Bhavin Pande
Okay. And sir, across channels, are we seeing that flow share is higher than the stock share?
A. Balasubramanian
No, what did you ask?
Bhavin Pande
The flow share, is it higher than the stock share across channels? Flow market share, it is higher than the stock market share?
A. Balasubramanian
Stock market share? I didn’t get your point.
Bhavin Pande
So sir, so let’s say, we have acquired the market share in terms of AUM to the incremental flows — I’m talking about that.
A. Balasubramanian
Flows market share — no, at this point of time, I think from industry market share flows versus us, we’re, of course, below the industry shares. Our attempt is, of course, improve the numbers further. So I think, the way I think industry is also growing so fast as line as we get our deserving market share. Not necessarily it has to be higher than the market. As long as we have deserving market share, which is what our attempt is, that itself will be sufficient actually to bring in incremental further growth.
Bhavin Pande
Okay. Great. Good luck, sir.
Operator
Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
A. Balasubramanian
Yes. Thank you, everyone, for joining. And with this, we conclude our Q2 FY ’25 earnings call. I’ll also take the opportunity to wish you all a very happy and prosperous Diwali. And do feel free to reach out to our IR Head, Prakash Bhogale, for any queries that you may have. Thank you.
Operator
[Operator Closing Remarks]