Buy HDFC Asset Management Company; target of Rs 4700: Prabhudas Lilladher

Prabhudas Lilladher is bullish on HDFC Asset Management Company has recommended buy rating on the stock with a target price of Rs 4700 in its research report dated January 15, 2025.

Broker Research

January 15, 2025 / 12:33 IST

Buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on HDFC Asset Management Company

HDFC AMC saw a strong quarter as core income beat PLe by 5.1% due to (1) revenue being 2.1% higher led by better yields at 47.5bps (PLe 46.5bps) and (2) opex being 8.4% lower, driven by 14.4% QoQ fall in other opex. While equity share declined QoQ to 61.1% from 62.1%, equity yields were better led by commission rationalization and correction in equity markets. Equity performance within the 1-yr/3-yr buckets remains superior, which resulted in strong net flows’ market share of 13.0% in 9MFY25. We raise core EPS for FY25E by 2.5% due to increase in blended yields. Closing equity AuM for the industry corrected by 5.2% over Sep-Dec’25 and equity markets continue to remain weak.

Outlook

Hence equity markets have a downward bias, and a further correction could lead to earnings downgrade for AMCs. Over FY25-27E we expect core PAT CAGR of 15% and stock is valued at 28.4x on Sep’26 core EPS. Due to weak equity markets, we trim multiple to 35x from 41x and cut TP to Rs4700 from Rs5,360. Retain ‘BUY’.

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