Shares of this Large-cap NBFC jumped to an intraday high of 4.89% after it was issued a BUY rating with a 15% Upside as higher Assets under management (AUM) growth is expected, as there is a great opportunity for higher growth.
Stock Action:
Shares of HDFC Asset Management Company Ltd, with a market capitalization of Rs. 93,351.4 Crores, closed at Rs. 4,370.05 per share on Wednesday, up by 4.38% from its previous close of Rs. 4,186.65 per share.
Target Recommendation:
Nomura has initiated coverage on HDFC Asset Management Company with a positive ‘buy’ rating and a target price of Rs 5,000, reflecting a potential upside of 15% from its current stock price. The brokerage highlights HDFC AMC’s robust profitability and a significant market presence, specifically highlighting its 13.3% share of the retail AUM market.
Currently, mutual fund assets under management in India account for only 18% of GDP, compared to the global average of 65%, indicating a substantial market opportunity for growth.
Following the recent merger, HDFC AMC is expected to expand its market share further, contributing to a projected compound annual growth rate of 19% for both AUM and core earnings through FY 2024 to 2028. This growth trajectory positions HDFC AMC advantageously within the Indian asset management sector, which is experiencing increased retail participation and a substantial opportunity for expansion.
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Financials:
The company reported revenues of Rs. 3,163.39 Crores in FY 2024, up from Rs. 2,482.66 Crores in FY 2023, resulting in 27.42% year-on-year growth, and net income for the same period increased from Rs. 1,423.37 Crores to Rs. 1,942.69 Crores, resulting in 36.5% growth in net income.
Shareholding Pattern:
As of the June quarter, shareholding pattern the company promoters own 52.52% stake, while Foreign institutional investors own 20.61% of the company, Domestic institutional investors own 17.67% of the company, and the retail investors hold 9.20% stake in the company.
About the Company:
HDFC Asset Management Company Limited (HDFC AMC) is a leading mutual fund manager in India, offering a wide range of investment options for individuals, institutions, and intermediaries. With over two decades of experience, HDFC AMC focuses on transparency, governance, and risk management, aiming to become a globally respected asset manager.
The company operates through 255 Investor Service Centres across 200 cities, providing tailored solutions and services, including Portfolio Management and Separately Managed Accounts for High Net Worth Individuals and institutions.
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Written By: Arvind jv
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