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PL Capital Report
Canara Robeco Asset Management Company Ltd. reported a strong performance for the June quarter, prompting PL Capital to raise its target price to Rs 285 from Rs 280. However, the brokerage retained its 'Hold' rating, citing the need for sustained improvement in fund performance and net inflows for a potential re-rating.
According to the brokerage, Canara Robeco saw a good quarter; as core PAT was a beat due to better revenue yield at 39.2bps versus brokerage estimate of 37bps mainly led by effective control in TER related costs.
Company expects blended yields to be within a band of 35-38bps. Cost to income for FY27 is guided to be between 38-42% (41% in FY26).
SIP flows fell by ~5% QoQ, which was attributed to industry-wide decline led by volatile markets.
PL Capital remains watchful of equity performance and net flows, as re-rating would hinge on the same.
Following the quarterly performance, PL Capital increased its FY27 and FY28 revenue estimates by roughly 5.5% and raised its earnings forecasts. The brokerage also nudged up its target price to Rs 285, reflecting improved yield assumption.
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