Buy HDFC AMC; target of Rs 3000: ICICI Direct
ICICI Direct is bullish on HDFC AMC has recommended buy rating on the stock with a target price of Rs 3000 in its research report dated July 24, 2020.
July 24, 2020 / 04:41 PM IST
ICICI Direct's research report on HDFC AMC
HDFC AMC reported a steady performance in the current scenario. Recovery in equities led to a revival in AUM. However, a decline in market share remains a drag. Recognition of full impact of volatility in Q1FY21 led to a decline in topline offset by lower opex and higher other income. Industry AUM increased to Rs 25.5 lakh crore as of June 2020 compared to Rs 22.3 lakh crore as of March 2020, largely led by a pick-up in equity markets. Equity related AUM grew from Rs 8.3 lakh crore in March 2020 to Rs 9.8 lakh crore. However, proportion of equity AUM stayed broadly flat at 38%. Debt, liquid schemes saw healthy traction at ~4%, ~19% QoQ increase to Rs 8.1 lakh crore, Rs 4.9 lakh crore, respectively. SIP inflows dipped 8.1% QoQ to Rs 7900 crore, though SIP accounts were a tad up 3.5% QoQ to Rs 3.2 crore.
Given business model with least credit risk, long term growth potential and strong fundamentals, we remain positive on the stock. Thus, we maintain our target price at Rs 3000/share and BUY recommendation on the stock.
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