HDFC Asset Management Company: Targeted Price of Rs 3000 by Prabhudas Lilladher
HDFC Asset Management Company Sees Soft Quarter, Outlook Remains Positive
HDFC Asset Management Company (HDFCAMC) has reported a soft quarter, with its core income at INR 8.4 billion being 2.3% lower than the previous estimate (PLe). This underperformance can be attributed to the reduced number of days in the fourth quarter of FY26 (90 days) compared to the third quarter of the same fiscal year (92 days).
The company has suggested that the impact of the Goods and Services Tax (GST) on its Total Expense Ratio (TER) directives may be in the range of 3-4 bps, which could be passed on to distributors. Notably, HDFCAMC's market share in net flows remains strong, with a 2nd highest position, and it was 15% in FY26. Consequently, the stock's equity market share increased by 6 basis points quarter-on-quarter to 13% in Q4FY26.
Outlook and Recommendations
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Despite the soft quarter, HDFCAMC is well-positioned to navigate the impact of the new TER guidelines, given its pedigree. As a result, we have factored a decline of 1 bp each in equity yields over FY26-28E. We have tweaked our multiple to 36x on Mar'28 core EPS, but maintained our target price at INR 3,000. Our recommendation for HDFCAMC remains 'BUY'.
| Company | FY26 Market Share | Q4FY26 Market Share | Change |
|---|---|---|---|
| HDFCAMC | 15% | 13% | -6 bps |
Note: The market share change is calculated as a decrease from FY26 to Q4FY26.
Investor Takeaway
Investors should consider buying HDFC Asset Management Company with a target price of Rs 3000.
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