HDFC AMC - Q1 FY22 Result report - YES Securities

(Rating: ADD, TP: Rs3,283, Upside: 6%)

Weaker yields, higher costs impact performance

Our view: We are cutting our estimates for HDFC AMC on the back of weaker than expected AUM performance YTD and lower yields. Sustained market share loss needs to be corrected for which the fund performance has started improving and the company is launching new products. We value the company at 38x average EPS of FY23E and FY24E to arrive at a fair value of Rs3,283 (Rs3,245 earlier). We have raised our valuation multiple given that the industry is now heading into a strong growth phase. Retain our ADD rating.

Revenue - Management Fees was at Rs.5bn was in line with our estimates. Management fees were higher by 23% yoy and witnessed a growth of 1% on sequential basis.

Yield on Management fees - The Yield on Management fees was at 0.49%, which was a increase of 3bps YoY, in line with our estimates. Improvement in yield was led by favorable product mix (higher share of equity).

New launches: Sectoral NFO - Banking (Rs18,770mn, Asset allocation FoF Rs11,000mn), Future launches: Multicap fund, in thematic and sector a MNC fund, passive - couple of products of which one would be equal weight nifty fund, one international fund over the next couple of quarters

Shares of HDFC Asset Management Company Ltd was last trading in BSE at Rs.2992.05 as compared to the previous close of Rs. 3089.3. The total number of shares traded during the day was 45895 in over 3395 trades.

The stock hit an intraday high of Rs. 3060 and intraday low of 2976.75. The net turnover during the day was Rs. 137885304.

Source : Equity Bulls

Keywords