Buy HDFC Asset Management Company; target of Rs 4450: Prabhudas Lilladher

Prabhudas Lilladher's research report on HDFC Asset Management Company

HDFCAMC’s MD&CEO sounded optimistic on growth potential of India’s AMC space, drawing parallels US market from 1980s-2000s. Hence unique investors for the MF industry (52.6mn in Dec’24) can increase at a good pace. HDFCAMC will be a dominant player in this journey as its strong brand value is a function of its track record led by strong investment, risk and product management. Investor behavior is maturing as industry saw stable SIP flows during falling markets. Distributors have not objected to commission cuts as AuM growth was robust and AMCs cannot bear TER cuts for an elongated time.

Outlook

Closing equity AuM for industry corrected by 9.4% over Oct’24-Jan’25; hence we trim core EPS for FY26/27E by avg. 5%. Stock is valued at 29.0x on Sep’26 core EPS; we maintain multiple of 35x but cut TP to Rs4,450 from Rs4,700. Retain ‘BUY’.