YES Securities' research report on Aditya Birla Sun Life AMC
Calculated operating revenue to AUM (yield) inched lower 1bp from 45 bps to 44 bps on sequential basis: The key reasons for pressure on yield is size issues and new money coming in at higher expenses. As per management, there would continue to be a slight drop in TER going forward. Management commentary alluded to potentially improved market share in the equity segment going forward: The pace of decline in Equity segment market share has reduced in 2HFY22. There has been an improvement in contribution from the banking channel. Furthermore, in FY23, the industry focus on NFOs would be reduced in comparison to FY22, which would help the company. Also, there is an acute focus on SIP business at the company and the target is to do a business of Rs 10bn on a monthly run rate basis. Fund performance has also improved in certain key funds.
We maintain ‘BUY’ rating on ABSL AMC (ABSL) with a revised price target of Rs 692: We value ABSL at 25.5x FY23 P/E for an FY21-24E EPS CAGR of 20.6%.
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