Buy HDFC Asset Management Company; target of Rs 3060: ICICI Securities

ICICI Securities is bullish on HDFC Asset Management Company has recommended buy rating on the stock with a target price of Rs 3060 in its research report dated January 16, 2026.

Broker Research

January 19, 2026 / 21:11 IST

Buy

ICICI Securities's research report on HDFC Asset Management Company

We have been positive on asset management space, considering the levers of stable systematic investments and a better yield outlook now led by the passage of recent regulations on TER. HDFC AMC’s 9MFY26 result has been in line with that thesis, with 18.8% YoY increase in core EBITDA driven by 17.2% YoY end-to-end AUM growth and stable blended yields. Over the years, consistent fund performance has led to superior business metrics such as stable equity market share, increasing unique investor share and SIP flow market share across channels. We estimate ~3%/15%/16% end-to-end AUM growth in Q4FY26/27/28E and ~1.1bps drop in yields between Q3FY26–FY28E. The prospect of declining yields with AUM growth remains a risk due to telescopic pricing, fresh flows, regulation and competition, but it is lower now. Upgrade to BUY. We believe high equity mix, low cost to AUM and past track record of cost salience justify high multiples for HDFC AMC

Outlook

Upgrade to BUY from Add; TP unchanged at INR 3,060 Our valuations are based on 40x FY28E (earlier 45x FY27E) core EPS of INR 70.7 (earlier INR 63) and cash of INR 239 per share, resulting in an unchanged TP of INR 3,060. Key assumptions: 1) ~3%/15%/16% growth in AUM (end to end) in Q4FY26/27/28E. 2) Nearly ~1.1bps cumulative decline in yields between Q3FY26 and FY28E. 3) Total cost CAGR of 14% over FY25–28E.

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