Buy HDFC AMC; target of Rs 2400: ICICI Direct

ICICI Direct is bullish on HDFC AMC has recommended buy rating on the stock with a target price of Rs 2400 in its research report dated April 27, 2022.

Broker Research

April 29, 2022 / 12:55 PM IST

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

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ICICI Direct's research report on HDFC AMC

HDFC AMC is among the largest and profitable mutual funds with an QAAUM of ~Rs 4.3 lakh crore as on March 2022. Market share as on Q4FY22 was at 10.8% • Strong distribution network with 228 branches and over 75,000 empanelled distribution partners.

Outlook

We upgrade our rating to BUY from Hold. HDFC AMC has maintained fundamental strength with superior yields and profitability. We value HDFC AMC at ~28.5x FY24E EPS and revise our target price from Rs 2550 to Rs 2400.