Accumulate HDFC Asset Management Co; target of Rs 2318: KR Choksey

KR Choksey's research report on HDFC Asset Management Co

QAAUM (Quarterly Average Assets Under Management) of INR 4,321 bn as on 31st March 2022, a growth of 4% YoY. The market share in QAAUM stood at 11.3% of the mutual fund industry. In Q4FY22, revenue growth stood at INR 5,163 Mn, a growth of 2.7% YoY, while declined 6.1% QoQ owing to sequential fall in AUM. For the full year FY22, the revenue was reported at INR 21,154 Mn, an increase of 14.2% YoY. The EBITDA during Q4FY22 stood at INR 3,935 Mn (excluding other income), was flat on YoY basis. PAT grew 8.7% YoY while de-grew 4.5% QoQ at INR 3,436 Mn. The YoY growth was on the back of higher other income at INR 647 Mn compared to INR 426 Mn in Q4FY22. The PAT for full year FY22 stood at INR 13,931 Mn, a growth of 5.1% YoY.

HDFCAMC shares are currently trading at a P/E of 29.0x/26.4x on FY23E/FY24E earnings. We are applying a P/E multiple of 30x on FY24E EPS of INR 77.3 to arrive at a target price of INR 2,318 per share (previously INR 2,500), an upside of 13.6% over the CMP. We maintain our rating of “ACCUMULATE” on the shares of HDFC AMC.

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