HDFC AMC Q3 Results: PAT Jumps 32% To Rs 488 Cr; Revenue Reached Rs 671.3 Cr

On Thursday, HDFC Asset Management Company Ltd. (HDFC AMC) revealed that its profit after tax (PAT) for the third quarter of FY 23-24 jumped by 32% year on year to Rs 488 crore from Rs. 369.2 crore recorded in the same period last year.

According to an exchange statement by HDFC AMC, the company's consolidated revenue jumped by 20% YoY to Rs 671.3 crore in Q3FY24 from Rs 559.6 crore in Q3FY23.

The asset management company said its assets under management (AUM) reached Rs 5.75 lakh cr, whereas Quarterly Average Assets Under Management (QAAUM) stood at Rs 5.51 lakh crore.

"During the period ended December 31, 2023, the Company has paid a final dividend of 't 48 per equity share (face value of 't 5 each) for the year ended March 31, 2023 as approved by its shareholders at the Annual General Meeting held on June 26, 2023," said HDFC AMC in a regulatory filing.

For the quarter ending December 31, 2023, HDFC Asset Management Company had a QAAUM market share of 11.2%, placing it among the largest mutual fund managers in India. On the other hand, the company's QAAUM market share of 12.6% for the quarter placed it among the largest managers of actively managed equity mutual funds in India. The ratio of equity-oriented QAAUM and non-equity-oriented QAAUM is ~61:39, compared to the industry ratio of 53:47 for the quarter ended December 31,2023, according to HDFC AMC.

According to HDFC Asset Management Company, 6.81 million Systematic transactions of Rs 26.3 billion were carried out in December 2023. Individual investors provided 70.0% of the company's total monthly average AUM for November 2023, compared to 59.2% for the industry.

With a market share of 13.2% of each individual monthly average AUM for November 2023, the firm is among individual investors' top picks. As of December 31, 2023, the corporation had 14.9 million active accounts worldwide. As of December 31, 2023, there were 8.7 million unique consumers as determined by PAN or PEKRN, a share of 20.6%, compared to 42.0 million for the industry.

Commenting on the valuation, InCred Equities said "We continue to appreciate the strong scheme-wise delivery provided by the company which, in turn, has resulted in a surge in equity funds' AUM and an improvement in market share for the AMC.

This will also support yields and profitability in the coming quarters. However, post recent rise, we believe that most positives are already factored in the stock price and there is a limit to further upside. We have revised our earnings estimates by 22%/~27% for FY25F/26F, respectively. We retain HOLD rating on the stock with a higher target price of Rs3,550, corresponding to ~36x FY25F EPS, from Rs2,700. Downside risks: Lower growth and industry-related risks. Upside risks: Improved inflows and a relatively faster gain in market share."