While brokerage firm Nomura has a “buy” rating on the stock, HSBC has a “hold” recommendation.
Why Is Nomura Bullish On HDFC AMC?
The brokerage has a “buy” recommendation on HDFC AMC with a price target of ₹3,130 apiece. This indicates an upside of 14.7% from its previous closing price.
It said the first quarter yield-led core earnings beat estimates and the AMC’s outlook was unchanged.
Nomura said the revenue yield expansion is unlikely to sustain and has trimmed its estimated earnings per share (EPS) for FY27, FY28 by 1% due to higher opex.
The brokerage added that HDFC AMC has strong unique investor addition, resilient systematic flow and its improving performance going in its favour.
HSBC Wants More From HDFC AMC
The brokerage has a “hold” rating on HDFC AMC with a target of ₹2,590 apiece.
It said the sequential yield expansion by two basis points was a surprise, although it is not structural.
HDFC AMC’s Assets Under Management (AUM) market share declined by 20 basis points, and despite fundamentals being healthy for the stock, HSBC believes that a meaningful operating performance from the stock is needed in comparison to its peers for it to re-rate again.
HDFC AMC’s Q1 Results
HDFC AMC’s first quarter earnings were largely in-line with estimates. Its yields improved sequentially with higher alternatives and equity AUM mix.
The alternatives AUM grew 13% sequentially to ₹14,800 crore.
Its market share moderated across equity and overall AUM.
The company’s expenses grew 19% from the previous quarter, leading to a sequential margin dip, although they still remained healthy at 77%.
Its ₹262 crore order income compared to ₹11 crore in the fourth quarter was driven by market-to-market gains, aiding profit after tax (PAT) growth.
Brokerage views and stock performance
Of the 30 analysts who have coverage on the HDFC AMC stock, 26 have a “buy” rating and four have a “hold” rating.
Shares of HDFC AMC are trading 4.7% lower on Thursday at ₹2,601. The stock, as a result of today’s drop, has turned negative for the year.
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