Buy HDFC Asset Management Co; target of Rs 4905: KR Choksey

KR Choksey is bullish on HDFC Asset Management Co has recommended buy rating on the stock with a target price of Rs 4905 in its research report dated July 18, 2024.

Broker Research

July 18, 2024 / 13:42 IST

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26 Aug, 2025 12:21

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KR Choksey's research report on HDFC Asset Management Co

In Q1FY25, revenue growth stood at INR 7,752 Mn, an increase of 34.9% YoY/ 11.5% QoQ, led by strong AUM growth and sequential improvement in blended yields. Revenues were in line with our estimates. EBITDA was reported at INR 5,949 Mn (excluding other income), which grew by 38.8% YoY/ 10.6% QoQ with margins of 76.7%. EBITDA margins expanded by 215 bps YoY, led by healthy revenues. EBITDA was 1.9% lower than our estimates slightly higher operating expenses. Net profit for Q1FY25 grew by 26.5% YoY/ 11.7% QoQ to INR 6,040 Mn, led by higher other income and a lower tax rate of 19.7%. Thus, these two factors resulted in a 5.6% higher net profit than our estimates.

Outlook

We revised our EPS estimates upward for FY25E and FY26E by 4.6% and 7.1%, respectively, primarily driven by higher AUM growth. We are applying a P/E multiple of 40x (earlier 37x) on FY26E EPS of INR 122.7 to arrive at a target price of INR 4,905 per share (earlier INR 4,235), an upside of 20.0% over the CMP. We have maintained our “BUY” rating on the shares of HDFCAMC.

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