UTI AMC, HDFC AMC, 2 other AMC stocks to buy/add as recommended by ICICI Securities

“First being, standard deviations based on its estimates for HDFC AMC and UTI AMC 2) there is an increase in passive AUM mix across AMCs in November 2022 (over March 2022) by 71/32/11/4 bps for IPRU AMC/ABSL AMC/HDFC AMC/Axis MF, around 400 bps each for UTI and SBI MF and 280 bps for Nippon Life India Asset Management (NAM) and 3) fund performance has remained impressive for HDFC AMC,” the note stated.

The brokerage house has Buy tag on UTI AMC shares with a target price of ₹961, whereas it has Add ratings on HDFC AMC (TP: ₹2,210), Nippon Life India AMC (TP: ₹291), and Aditya Birla Sun Life AMC (TP: ₹473).

HDFC AMC’s overall market share improved marginally by 4 bps MoM to 10.98% driven by improvement in equity market share to 11.82% while debt market share was 13.3% (down 8.5bps) and passive market share improved to 1.27% (up 2.5bps). 

NAM’s overall market share remained steady at 7.3% with steady market share in equity segment at 6.3%. UTI too saw a steady overall market share at 6% with equity/debt market share at 4.7%/7.1% while passive market share improved to 13%. ABSL AMC market share declined marginally to 6.96% with equity/debt declining to 5.78%/10.1%, the brokerage highlighted.

November 2022 mutual fund (MF) overall flows stood at ₹133 bn vs ₹140 bn in October 2022. Equity inflows (ex-index flows) dipped sharply by around 75% MoM to ₹22 bn. 

Within equity, flexi flows and large-cap flows turned negative while flows into small and midcap schemes remained steady. Debt flows saw strong recovery with November 2022 witnessing an outflow. Strong recovery in debt flows was on account of strong positive flows into corporate bonds and fixed term plan.

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