HDFC AMC reported a mixed performance wherein subdued revenue was offset by unsustainable other income leading to growth in earnings. Equity AUM increased led by rally in equities, though stains of redemption were evident. Robust accretion in debt schemes led to healthy traction in overall AUM.
Industry AUM increased from Rs. 26.9 lakh crore as of Q2FY21 to Rs. 31 lakh crore as of Q3FY21, largely led by pick up in non-equity inflows. Equity related AUM increased by 12% YoY at Rs. 12.2 lakh crore, proportion of equity AUM stood at 39% as against 41% YoY. Debt schemes witnessed healthy traction at ~31% YoY. SIP inflows increased sequentially from Rs. 7800 crore to Rs. 8400 crore.
Valuation & Outlook
Healthy accretion in debt schemes which are relatively low yielding and continued contraction in market share in equity AUM remain near term concern. Aiming at accelerating AUM growth and gain market share, steps have been undertaken including product launches, introduction of festive offers, bringing diversification in investment style. We continue to remain positive on the strong brand franchise and efficient operational strength, however, still clarity is awaited on outcome of steps undertaken to shore up AUM. Rolling on FY23E estimates, we revise our target price to Rs. 3000 per share (earlier Rs. 2500). With recent rally in stock price, we maintain our HOLD rating on the stock.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_HDFCAMC_Q3FY21.pdf
Shares of HDFC Asset Management Company Ltd was last trading in BSE at Rs.3104 as compared to the previous close of Rs. 3205.9. The total number of shares traded during the day was 35568 in over 5165 trades.
The stock hit an intraday high of Rs. 3195.15 and intraday low of 3080.05. The net turnover during the day was Rs. 111040217.