HDFC AMC’s ‘near perfect’ Q2 a big hitPersonal FinanceHDFC AMC’s ‘near perfect’ Q2 a big hit

HDFC AMC’s ‘near perfect’ Q2 a big hit


Shares of HDFC Asset Management Co. Ltd (HDFC AMC) scaled a new 52-week high of 2,910 apiece on Friday. The September quarter (Q2FY24) results have brought cheer. Kotak Institutional Equities analysts point out, “HDFC AMC’s Q2FY24 results were near perfect, with both headline/core earnings up 20% year-on-year along with strong operating metrics such as fund performance, customer addition, SIP flows and yield expansion.” HDFC AMC’s Q2 profit stands at 438 crore.

The striking factor is that the equity segment has done well and its share in the asset mix has inched up. For AMCs, equity has higher margin in the assets under management (AUM) mix. In Q2, share of equity in HDFC AMC’s quarterly average AUM grew to 57.6% from 51.9% a year ago and 54.2% a quarter ago. Despite the ongoing uptrend in the Indian stock markets, the share of equity in the mix rose due to more money flowing in. Thus, the share of liquid and debt schemes in the asset mix, fell in Q2.

Graphic: Mint

View Full Image

Graphic: Mint

Increasing equity mix has fuelled HDFC AMC’s blended revenue yields to 49 basis points (bps), up 2 bps sequentially. Overall, HDFC AMC saw 22% year-on-year growth in quarterly average AUM led by 36% growth in equity AUMs.

Investors seem pleased, taking the shares up by almost 4% in the past two trading days.

To be sure, the HDFC AMC stock has outperformed peers in the past one year, rising by 49%, gaining the most in the latter part of this period.

“HDFC AMC stock has seen a sharp bounce back since the lows seen post Sebi discussion paper on proposed TER (total expense ratio) changes given that Sebi has indicated that a revised discussion paper is in works,” said a report by JM Financial Institutional Securities. An adverse change in TER would have hit revenue and yield for all AMCs, with larger companies getting affected more. Investors are relieved that the TER matter has been temporarily set aside. Going ahead, investors would do well to follow the potential changes.

For the stock, much also depends on the momentum of retail equity flows and how the broader markets shape up. For now, many view HDFC AMC’s valuations as pricey.

“Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!” Click here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Finplay.
Download Finplay News App to get Daily Market Updates.

More
Less

Updated: 15 Oct 2023, 11:46 PM IST

Disclaimer: Along with publishing our own news, we get news from various sources namely from news wires ANI, PTI, other reputed finance portals and individual journalists. We are not legally liable for any inaccuracies in the news and expect the reader to do their own due diligence.

http://ganesh@finplay.in

Finance enthusiast, Mutual fund expert.




Leave a Reply

Your email address will not be published. Required fields are marked *

Finplay

AMFI-registered Mutual Fund Distributor ARN-192179

Company

© 2024 Finplay Technologies Private Limited. All Rights Reserved.