Nuvama Institutional Equities has identified HDFC Asset Management Company (HDFC AMC) and Aditya Birla Sun Life Asset Management Company (ABSL AMC) as its top selections in the asset management sector. The assessment is based on an analysis of mutual fund performances and ongoing market trends, with a focus on sustained SIP inflows and steady capital markets as key factors for potential earnings growth.
HDFC AMC: Stable Performance with Minor Decline
HDFC AMC reported that 81.9% of its rated AUM was in outperforming schemes as of July 2024, slightly down from 88% in February. Some funds, including HDFC Hybrid Equity and HDFC Multi-Asset, saw a drop in their ratings, though the company still holds a strong market share in inflows. Nuvama has maintained its ‘BUY’ rating for HDFC AMC with a target price (TP) of INR 4,910.
ABSL AMC: Mixed Performance, Attractive Valuations
ABSL AMC’s performance remained inconsistent, with no funds in the outperforming category. However, 43% of its rated AUM holds three-star ratings, up from 38.2% in February 2024. Nuvama has retained its ‘BUY’ rating for ABSL AMC, setting a target price of INR 820, citing relatively lower valuations.
NAM: Moderate Performance Decline
Nippon India Asset Management (NAM) saw a decline in performance, with 63.5% of its rated AUM in outperforming schemes in July, down from 70.9% in February 2024. Despite this, the Nippon India Small Cap Fund remains a strong performer. Nuvama continues to recommend a ‘BUY’ on NAM with a target price of INR 770.
Nuvama’s report provides a cautious outlook, with HDFC AMC and ABSL AMC as key picks based on their performance and market positions.
