Accumulate HDFC Asset Management Co; target of Rs 5388: KR Choksey

KR Choksey recommended Accumulate rating on HDFC Asset Management Co with a target price of Rs 5388 in its research report dated October 17, 2024.

Broker Research

October 18, 2024 / 10:59 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

KR Choksey's research report on HDFC Asset Management Co

In Q2FY25, revenue stood at INR 8,872 Mn, an increase of 38.0% YoY/ 14.4% QoQ, led by strong AUM growth and sequential improvement in blended yields. Revenues were 2.3% better than our estimates. Net profit for Q2FY25 grew by 31.8% YoY (-4.5% QoQ) to INR 5,767 Mn, driven by healthy growth in the operating performance. HDFCAMC continues to work closely with HDFC Bank to boost market share and increase SIP contributions through the bank’s distribution channel. The company's expansion into B-30 markets, along with consistent performance in equity-oriented funds, is strengthening its path of growth. We revised our EPS estimates upward for FY25E and FY26E by 8.7% and 15.6%, respectively, primarily driven by higher AUM growth led by the equity market optimism.

Outlook

We are applying a P/E multiple of 38x on FY26E EPS of INR 141.8 to arrive at a target price of INR 5,388 per share (earlier INR 4,905), an upside of 11.6% over the CMP. We downgrade our rating to “ACCUMULATE” from “BUY” on the shares of HDFCAMC based on the share price appreciation.

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