HDFC Asset Management Company Ltd. shares are in focus after Jefferies and Kotak Securities maintained their Buy ratings on the stock following its September quarter performance. While the company's reported net profit and total income declined sequentially, brokerages highlighted stronger core earnings, improved yields, and lower operating expenses as key positives.
Jefferies Sees EPS Growing at 13% CAGR: Maintained Buy Rating
Jefferies raised its target price to Rs 3,050 from Rs 2,950, citing an operating performance beat driven by better yields and lower operating expenses. The brokerage expects the company's earnings per share to grow at a 3-year compound annual growth rate of 13%.
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Jefferies noted that the company's blended yield improved as equity-oriented assets under management accounted for a higher share of the overall mix. It also highlighted the continued expansion of HDFC AMC's alternatives business through the launch of new funds.
Kotak Securities Sees Higher Core Earnings Growth: Maintained Buy Rating
Kotak Securities maintained its Buy rating on HDFC AMC with a target price of Rs 2,800. The brokerage said higher yields drove a beat in core earnings, with growth reaching 16% year-on-year, ahead of estimates.
The equity mix increased by 140 basis points sequentially, supporting an improvement in overall yields. Kotak Securities considers the stock's valuations reasonable and remains constructive on its outlook.
HDFC AMC Q2 Results
HDFC AMC reported a consolidated net profit of Rs 749 crore for the September quarter, down 10.5% from Rs 837 crore in the preceding quarter. Total income declined 9% sequentially to Rs 1,241 crore from Rs 1,363 crore.
The sequential decline in reported profit and income contrasted with the operating strength highlighted by the brokerages, particularly in core earnings
Also Read: HDFC AMC Q2 Results: Net Profit Falls 10.5%, Total Income Dips 9%
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