Shares of HDFC AMC fell nearly 2 percent at open after the fund house announced its fourth-quarter results on April 19. The results were announced after market hours. At 9:20 am, the stock was trading at Rs 3,670.
In an exchange filing, HDFC Asset Management Company (HDFC AMC) reported a consolidated net profit of Rs 540.84 crore for the quarter ended March 2024, a 43.77 percent year-on-year jump from Rs 376.17 crore. Consolidated revenue for the same period increased by 28.55 percent to Rs 695.43 crore from Rs 540.95 crore. The AMC closed with Quarterly Average Assets Under Management (QAAUM) of Rs 6.12 lakh crore.
What brokerages said
Analysts at HSBC maintained a hold call on the stock and raised the target price to Rs 3,505 from Rs 3,410. According to the brokerage, as the AUM grows, pressure on income yields would drive slower FY25-27 EPS growth than AUM growth. It expects the FY2024-2027 EPS compound annual growth rate to be at 12 percent, which is slower than the AUM CAGR Of 18 percent.
Morgan Stanley analysts also maintained their equal-weight call and increased the target price to Rs 3,325 from Rs 3,000 in January. According to the brokerage, while Profit After Tax beat estimates due to a lower deferred tax charge, Profit Before Tax was in line. The brokerage has decided to stay Equal Weight given "the elevated valuations, in context of structural pressure on equity yields.".
Nuvama analysts have retained their hold call with a slightly reduced target price of Rs 3,900, against Rs 3,970 earlier. According to the brokerage, despite an increase in equity AUM, blended yields declined 2.7 basis points YoY to 45.4 basis points as a result of a one-time adjustment in yields due to higher-than-expected distributor payouts.
The HDFC AMC stock has gained over 108 percent in the last 12 months and around 129 percent in the last five years.
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