Citi has upgraded HDFC Asset Management Company (HDFC AMC) to Neutral from Sell and raised its target price to ₹2,850, citing consistent strength in the fund house’s performance across key actively managed categories and easing concerns around near-term regulatory risks. The brokerage said HDFC AMC has delivered sustained outperformance in high-yielding active strategies, which has helped stabilise market share after several years of competitive pressure.
Citi also noted that management’s increasing focus on expanding non-mutual fund businesses—particularly products targeting affluent and emerging affluent investors—adds an incremental layer of growth optionality. While the broader AMC landscape remains competitive and distribution-led advantages for incumbents have narrowed, Citi believes the improving performance cycle offers a more balanced risk-reward profile compared to earlier expectations.
According to the brokerage, limited visibility of any adverse regulatory overhang in the near term further supports the upgrade, although it emphasised that competitive intensity and erosion of legacy moats remain key structural challenges. Citi maintained that the stock now trades at a valuation that adequately reflects these risks while giving credit for meaningful improvement in relative performance and non-MF scaling efforts.
Disclaimer: The views and recommendations above are those of Citi. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
