Brokerages Impressed With HDFC AMC's Q1 Show, Maintain 'Buy'

Brokerages were impressed with HDFC Asset Management Company's first-quarter results.

What Happened: HDFC AMC reported a 26% year on year jump in net profit to ₹604 crore in the June quarter. Its revenue surged 35% from the previous year to ₹775 crore. 

The company's assets under management (AUM) reached ₹7.05 lakh crore while equity-oriented AUM reached ₹4.72 lakh crore. 

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Brokerage Views: Jefferies maintained a "buy" call with a target price of ₹4,900 on the stock. The company delivered strong earnings led by sustained momentum in equity AUM, the research firm said.

Equity AUM share in quarterly average assets under managament (QAAUM) increased to 64.3%, the brokerage noted, adding that the company's core revenue expanded by 35% due to the 38% AUM growth.

The company's operating expense increased due to a new fund offer (NFO) and employee expenditure. The brokerage raised earnings its estimates by 1%-2% to factor in higher AUM and investment income. 

Nuvama Institutional Equities also maintained a "buy" call with a target price of ₹4,910. The research firm said the company's strong operating metrics continued to shine.

Active equity market share increased 0.8% to 12.9% while unique individual investors' market share rose to 5% to 23%. Its market share in the systematic investment plan (SIP) market share grew 2.21% to 15.1%. 

Price Action: Shares of HDFC AMC was up 0.37% to ₹4,212 on Tuesday morning. 

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