On October 13th, HDFC Asset Management Company (HDFC AMC) experienced a notable upswing, with its stock price surging over 3 percent. This uptick was triggered by a positive response from analysts who revised their earnings growth projections upwards following the release of robust financial results for the September quarter.
HDFC AMC reported a consolidated net profit of Rs 436.52 crore, marking a YoY increase of 20 percent from Rs 364.5 crore. Revenue from operations also saw a notable rise, reaching Rs 643 crore, an 18 percent increase from the Rs 574.54 crore recorded in the corresponding quarter of the previous fiscal year.
Market observers are particularly optimistic about HDFC AMC’s increased market share in the previous quarter. The company’s active equity market share expanded to 12.4 percent, representing a 90 bps YoY gain and a 30 bps QoQ increase. To clarify, a basis point is equivalent to one-hundredth of a percentage point.
In a similar vein, HDFC AMC’s Systematic Investment Plan (SIP) market share rose to 14 percent, reflecting a YoY growth of 300 bps and a QoQ increase of 114 bps. Furthermore, the market share of unique individual investors surged to 20 percent, indicating a YoY growth of 300 bps and a QoQ rise of 200 bps.
HSBC, which has issued a “hold” recommendation for HDFC AMC, increased its target price to Rs 2,580. They have also revised their earnings per share (EPS) estimates for FY24 and FY25 upwards by 4 percent due to the anticipated growth in assets under management
Nuvama Institutional Equities has raised its target price for HDFC AMC by 19 percent, setting it at Rs 3,170, up from the previous Rs 2,650.
Meanwhile, Morgan Stanley, while maintaining an “equal weight” recommendation for HDFC AMC, established a target price of Rs 2,375 per share. Their analysis underscores that the company’s strong performance in the equity market has been a significant driver of revenue growth.
Closing at Rs 2,852.40 on Friday, HDFC AMC’s shares experienced a notable 3.52% increase on the NSE.
Thanks to impressive Q2 financial results, the stock reached a fresh 52-week high price of Rs.2,910 during intraday trading on October 13th.