The leading asset management powerhouse in India’s financial sector has drawn mixed reactions from major brokerages in their latest analyses. While some analysts maintain optimistic growth projections and recommend buying, others express caution due to market share concerns and valuation pressures, highlighting diverse views on the company’s future trajectory.
Share Price Movement
The share price of HDFC AMC Limited hit an intraday high of 6.46 percent to Rs. 4,114.95 per share on Wednesday, an increase from its previous close of Rs. 3,865 per share. The market capitalisation now stands at approximately Rs. 86,358 crore as of January 15, 2025.
Brokerages Rating
1. Nomura
Nomura maintains a ‘Buy’ rating with a target price of Rs 5,250, offering a 16.7% upside. The brokerage raised FY25 EPS estimates by 2% and FY27 by 3%, driven by strong operating revenue and lower operational expenditure.
2. HSBC
HSBC holds a ‘Hold’ rating with a target price of Rs 4,350, implying a 3.4% upside. Despite strong profit growth, stagnation in market share and SIP flows puts pressure on higher valuations, leading to modest EPS estimate revisions.
3. Morgan Stanley
Morgan Stanley projects moderate revenue and net profit growth of 16% for FY26, driven by higher equity yields and commission rationalisation. While expecting steady growth, the brokerage forecasts a slowdown in the company’s momentum going forward.
4. Citi
Citi has a ‘Sell’ rating with a target price of Rs 3,700, reflecting a 7.3% downside. The brokerage highlights cost control and backbook restructuring as key growth factors but sees limited upside from current levels.
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Q3 Financial Highlights (Recent Update)
The AMC posted a net profit of Rs 641 crore in Q3 FY25, marking a 31% year-on-year increase. Revenue from operations rose 39% to Rs 671.32 crore. However, total income fell 2% quarter-on-quarter to Rs 1,028 crore from Rs 1,058 crore in Q2 FY25.
Competitors
Nippon Life India AMC, Aditya Birla Sun Life AMC, UTI Asset Management Company, Shriram AMC, and IL&FS Investment Managers are key competitors in the market.
Market Outlook
The Indian financial industry is experiencing strong growth, with the AUM of mutual funds increasing sixfold over the past decade. The insurance sector is set to reach a US $1 trillion investment corpus by 2025. Digital innovation is accelerating, with fintechs and mobile/internet expansion driving financial inclusion.
Government policy support, including increased FDI limits and plans for a digital rupee, further fuels growth. With rising penetration in rural areas and growing participation from HNWIs, the industry has significant untapped potential.
Written By Fazal Ul Vahab C H
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