HDFC Asset Management Company (HDFC AMC) has been in the spotlight, with several brokerages providing their outlook on the stock. Here’s a comprehensive look at what brokerages are saying, including their ratings, target prices, and key takeaways.
| Brokerage | Rating | Target Price (₹) | Key Takeaways |
|---|---|---|---|
| CLSA | Outperform | ₹4,920 | – AUM growth far exceeded expectations – Tax rate normalization expected from next quarter – Lifted EPS estimates by 5-9% for FY25-27 |
| Jefferies | Buy | ₹5,450 | – 46% YoY PBT growth in Q2FY25 – Yield uptick due to rationalization of distribution commissions – Operating expenses stable |
| Citi | Sell | ₹3,600 | – Core PBT growth of 45% YoY – Actively managed equity AUM rose 63% YoY – Cautious on yield moderation and market share decline |
| Morgan Stanley | Equal-weight | ₹4,120 | – PBT beat estimates due to higher other income – Elevated valuation limits further upside – Strong AUM growth but offset by tax impact |
Brokerage Insights on HDFC AMC:
- CLSA: Outperform, Target Price ₹4,920
CLSA has upgraded HDFC AMC to “Outperform” from “Hold,” raising the target price to ₹4,920. The brokerage noted that AUM growth was far ahead of expectations, and tax normalization is expected from the next quarter. CLSA has lifted its earnings per share (EPS) estimates by 5-9% for FY25-27, reflecting the company’s robust performance. - Jefferies: Buy, Target Price ₹5,450
Jefferies has maintained its “Buy” rating on HDFC AMC, setting a target price of ₹5,450. The company reported a 46% year-on-year (YoY) growth in pre-tax profit (PBT) in Q2FY25, driven by a 1 basis point increase in yields due to rationalization of distribution commissions across major equity schemes. Despite stable operating expenses, a higher one-time tax outflow related to legacy gains moderated profit after tax (PAT) growth to 32% YoY. - Citi: Sell, Target Price ₹3,600
Citi has maintained a “Sell” rating on HDFC AMC, with a target price of ₹3,600, reflecting a cautious outlook. Despite a 45% YoY growth in core PBT, Citi remains concerned about market share declines and yield moderation. While the actively managed equity-oriented AUM rose 63% YoY, the brokerage remains cautious, noting a slight decline in market share and potential headwinds. - Morgan Stanley: Equal-weight, Target Price ₹4,120
Morgan Stanley has taken a more neutral stance with an “Equal-weight” rating and a target price of ₹4,120. The firm highlighted that while HDFC AMC delivered strong PBT growth, the stock’s elevated valuation could limit further upside. The report also pointed out that higher other income helped beat profit estimates, although higher taxes due to recent changes led to a moderation in PAT growth.
Conclusion: Mixed Outlook Across Brokerages
Brokerages offer a mixed outlook on HDFC AMC, with CLSA and Jefferies maintaining positive views with target prices of ₹4,920 and ₹5,450, respectively. However, Citi has a more cautious stance, rating the stock a “Sell” with a target of ₹3,600 due to concerns over market share and yields. Morgan Stanley remains neutral, citing valuation concerns. Investors may need to weigh these varying perspectives while considering the company’s growth trajectory and market conditions.
Disclaimer: Stock market investments are inherently subject to risks, including the potential loss of principal. Past performance is not indicative of future results. Investors are advised to conduct their own research and consult with a certified financial advisor before making any investment decisions. The information provided in this article is for educational and informational purposes only and should not be considered financial advice. The publisher and author are not responsible for any investment losses that may occur based on the information contained in this article.
