Accumulate HDFC Asset Management Co; target of Rs 2500: KR Choksey

KR Choksey's research report on HDFC Asset Management Co

QAAUM of INR 4,367 bn as of December 31, 2021, a growth of 7% YoY. The market share in QAAUM stood at 11.6% of the mutual fund industry. The ratio of equity-oriented AUM and non-equity-oriented AUM is 47:53, similar/equal to the industry ratio of 47:53 in Q3FY22. In Q3FY22, revenue growth stood at INR 5,497 Mn, a growth of 14.1% YoY and 1.4% QoQ • The EBITDA during Q3FY22 stood at INR 4,144 Mn (excluding other income), a growth of 36.2% YoY but a sequential fall of 3% on the back of higher expenses. PAT de-grew 2.6% YoY while grew 4.5% QoQ to INR 3,598 mn. The YoY fall was due to higher tax rate compared to Q3FY21.

We are reducing our target multiple as we are cautious about the ongoing erosion of the company’s market share; as a result, we revise our rating to “ACCUMULATE” (previously BUY) on the shares of HDFC AMC.

At 16:00 hrs HDFC Asset Management Company was quoting at Rs 2,294.90, up Rs 75.80, or 3.42 percent.

It has touched an intraday high of Rs 2,308.20 and an intraday low of Rs 2,223.50.

It was trading with volumes of 23,500 shares, compared to its thirty day average of 19,879 shares, an increase of 18.22 percent.

In the previous trading session, the share closed up 0.61 percent or Rs 13.40 at Rs 2,219.10.

The share touched its 52-week high Rs 3,363.00 and 52-week low Rs 2,119.45 on 09 September, 2021 and 27 January, 2022, respectively.

Currently, it is trading 31.76 percent below its 52-week high and 8.28 percent above its 52-week low.

Market capitalisation stands at Rs 48,926.50 crore.

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