HDFC AMC drops 5% post-earnings as analysts cite long-term growth
HDFC Asset Management Company shares slid over 5% following a solid first-quarter earnings report, a drop analysts attribute to near-term debt headwinds rather than structural weakness.
HDFC AMC shares fell as much as 5.27% to ₹2,586.60 in early trading on Thursday after the company posted its first-quarter results. The decline comes despite the asset manager reporting a 12% year-on-year increase in consolidated net profit to ₹837.13 crore.
Operational revenue drove the bottom-line expansion, climbing 13.6% to ₹1,099.72 crore compared to the same period last year. The underlying business showed resilience, supported by sustained momentum in systematic investment plans and a favorable mix of equity-oriented assets under management.
The initial market sell-off appears to focus on short-term pressures rather than the quarterly earnings themselves. Mark-to-market movements and recent redemptions in debt funds temporarily weighed on the company's market share, offsetting the positive headline figures.
Brokerages view the dip as a buying opportunity rooted in long-term fundamentals. “While market share was impacted by MTM movements and debt fund redemptions in the near term, the company continues to outpace the industry in individual investor additions and systematic flows,” said Motilal Oswal Financial Services.
Motilal Oswal highlighted HDFC AMC's expanding product range across mutual funds, ETFs, portfolio management services, and alternative investments as key growth drivers. The firm raised its earnings estimates for fiscal years 2027 and 2028, projecting a 15% compound annual growth rate for revenue, EBITDA, and profit after tax through FY28. It reiterated a 'Buy' rating with a target price of ₹3,300.
Centrum Broking echoed this constructive outlook, revising its assets under management estimates upward. The brokerage now models a 17% compound annual growth rate for quarterly average assets under management over the FY26 to FY29 period, with the equity segment expected to outpace at 18%. It forecasts a 13% CAGR for both profit after tax and core profit after tax, maintaining its 'Buy' recommendation and lifting its price target to ₹3,340 from ₹3,145.
The stock's reaction contrasts with its longer-term trajectory. While shares have slipped roughly 2% over the past month and are down 3% year-on-year, they have rallied 119% over a three-year period, reflecting the broader secular shift toward institutional investing in India.
