Net Asset Value (NAV) of mutual funds is calculated after reducing expenses of a scheme from its assets. Important thing to note is that expenses of regular funds are higher because of commission that is paid out to distributors. On the other hand, expenses for direct funds are lower as no commission is involved in direct funds.
The lower expense ratio of direct plans results in better returns and higher NAV. For a detailed explanation of NAV calculation of direct funds, you can read this blog.
