Whalesbook
Analyst Reiterates Buy on HDFC AMC
HDFC Asset Management Company shares rebounded 4% today, snapping a three-day losing streak. The rally was sparked by Motilal Oswal Financial Services reiterating its 'Buy' rating and setting a ₹2,700 price target. The brokerage cited reasonable valuations, especially after a recent 17% stock correction, and HDFC AMC's strong industry leadership as key reasons for its positive outlook.
Growth Projections and SIP Momentum
Motilal Oswal forecasts HDFC AMC will see a 17% compound annual growth rate (CAGR) in Assets Under Management (AUM) between FY26 and FY28. Revenue, EBITDA, and profit are projected to grow at 15% annually during the same period. Strong systematic investment plan (SIP) inflows continue to be a significant driver, with SIP AUM climbing 24% year-on-year to ₹2.2 trillion. Retail investors form a substantial part of the customer base, accounting for 69% of Monthly Average Assets Under Management (MAAUM), well above the industry average of 60.1%.
Margins, Fund Performance, and Investor Base
The company maintains resilient operating margins, typically between 33% and 36%, among the industry's highest, supported by operating leverage and strict cost controls. HDFC AMC consistently demonstrates strong fund performance across various timeframes, which bolsters distributor confidence and fuels steady retail inflows. Its large and expanding investor base, reaching 15.4 million unique investors and 27.7 million live accounts as of December 2025, highlights its deep market penetration.
Attractive Valuations Following Correction
The recent 17% correction in HDFC AMC shares, which outpaced a 12-15% dip among peers, has made valuations more attractive, according to Motilal Oswal. This opportunity is amplified by the sustained strong systematic inflows and consistent fund performance. The brokerage noted that over the past year, HDFC AMC has outperformed the broader market, gaining 15% while the Nifty index declined by 4.50%.