Hold HDFC AMC; target of Rs 3000: ICICI Direct

ICICI Direct's research report on HDFC AMC

HDFC AMC reported a mixed performance wherein subdued revenue was offset by unsustainable other income leading to growth in earnings. Equity AUM increased led by rally in equities, though stains of redemption were evident. Robust accretion in debt schemes led to healthy traction in overall AUM. Industry AUM increased from Rs 26.9 lakh crore as of Q2FY21 to Rs 31 lakh crore as of Q3FY21, largely led by pick up in non-equity inflows. Equity related AUM increased by 12% YoY at Rs 12.2 lakh crore, proportion of equity AUM stood at 39% as against 41% YoY. Debt schemes witnessed healthy traction at ~31% YoY. SIP inflows increased sequentially from Rs 7800 crore to Rs 8400 crore.

Outlook

We revise our target price to Rs3000 per share (earlier Rs 2500). With recent rally in stock price, we maintain our HOLD rating on the stock.