Shares of asset management player HDFC Asset Management Company surged in trade on January 15, after the AMC reported a sharp 31 percent jump in profit profit for the October-December quarter (Q3) of financial year 2025 (FY25).
HDFC AMC reported a net profit of Rs 641 crore in Q3, up 31 percent. The company's revenue from operations also saw a significant on-year surge of 39 percent to Rs 671.32 crore in the quarter.
At 11.15 am, shares of HDFC AMC were up 4.5 percent, trading at Rs 4,040.5 per share on the NSE.
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The management guides to improve its market share and become the leader in the existing product offerings rather than focusing on bringing more new products to the bouquet. Additionally, expenses are expected to grow in the range of 12-15 percent YoY.
The increasing share of equity in the overall AUM, driven by an anticipated higher CAGR of 30 percent in equity AUM vs. overall AUM CAGR of 24 percent, will help to mitigate the potential decline in yield, said Motilal Oswal. The brokerage maintained its buy rating on the stock, with a price target of Rs 5,200, indicating a 35 percent upside.
"We believe strong inflows in Indian MF industry shall continue driven by under-penetration and increasing financial awareness. Strong SIP book and healthy capital market performance to drive AUM growth," said Nuvama Institutional Equities, keeping its 'buy' tag intact with a price target of Rs 5,200, up from Rs 5,150 earlier.
HSBC reiterated its hold rating on asset management firm, with a target price of Rs 4,350 per share. The company’s strong profit growth in Q3 was driven by rationalized commission payouts and controlled operating costs. However, stagnant market share in equity AUM and SIP flows could pressure its high valuations.
Nomura maintained its 'buy' call on HDFC AMC with a target price of Rs 5,250 per share, citing higher operating revenue and lower expenses, which led to a 6 percent beat in operating profit. Despite a 60 bps QoQ decline in SIP flow market share, overall and equity AUM market share remain steady. The brokerage sees a robust 20 percent CAGR in operating profit over FY25-27, largely aligned with AAUM growth.
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