Canara Robeco Asset Management Company Maintains Target Price of Rs 280: Prabhudas Lilladher

Canara Robeco Asset Management Company Reports Mixed Quarter

Canara Robeco Asset Management Company (CRAMC) has released its research report, highlighting a mixed performance in the previous quarter. The company's core Profit After Tax (PAT) saw a positive beat due to higher revenue and lower operating expenses (opex). However, Systematic Investment Plan (SIP) flows dipped by 3-4% on a quarter-on-quarter (QoQ) and year-on-year (YoY) basis.

The company attributed this decline in SIP flows to industry-wide pressure on Equity Linked Savings Schemes (ELSS) following taxation changes. In response, CRAMC is setting up dedicated SIP sales teams to increase SIP flows. Despite this, the company remains focused on active management, which may lead to a delay in the launch of passive products in the near term.

Key metrics for the quarter also showed an increase in revenue yield, rising by 2.9 basis points (bps) quarter-on-quarter. According to the company, this yield increase was driven by the replacement of high-cost assets with lower-cost ones.

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We maintain a multiple of 22x on the company's core Earnings Per Share (EPS) for March 2028 and keep our target price at INR 280. Based on this analysis, we have changed our rating to 'HOLD' from 'ACCUMULATE'.