HDFC AMC shares rally 5% after posting strong Q3 results; Should you buy or sell? | Stock Market News
Source: Live Mint
The shares of HDFC Asset Management Company (AMC) rallied nearly 5.30 per cent to ₹4,070.05 on Wednesday’s trading session after the company posted a 31 per cent increase in its consolidated net profit, which stood at ₹641 crore for the December quarter, compared to ₹488 crore in the same period last year.
The revenue from operations in Q3FY25 amounted to ₹935 crore, reflecting a 39 per cent increase compared to ₹671 crore recorded by the company in the same quarter of the previous financial year.
On a sequential basis, profit after tax (PAT) increased by 11 per cent compared to ₹577 crore reported in Q2FY25.
Additionally, revenue from operations grew by 5.3 per cent in comparison to ₹887 crore recorded during the July-September quarter.
The total income, which includes other income of ₹93.09 crore, amounted to ₹1,028 crore, rising from ₹1,058 crore in Q2FY25 and 814.18 crore in Q3FY24.
According to Trendlyne data, the stock’s average target price is ₹4,870, indicating a potential upside of 26 per cent from its current market level. Out of 25 analysts, the consensus recommendation for the stock is a ‘Buy’.
Should you buy or sell?
HDFC AMC shares have dropped by 15 per cent in the past month and 49 per cent over the last two years. The company’s current market capitalization is ₹82,589 crore.
Brokerage firm InCred Equities has maintained ‘Hold’ rating on HDFC AMC with a lower target price of ₹4,200.
“We appreciate the strong scheme-wise delivery provided by the company which, in turn, resulted in a surge in equity funds’ AUM and an improvement in market share. However, we feel that most positives are already factored in the stock price and there is a limit to further upside. We feel that other AMC stocks offer a better risk-reward ratio. We retain our HOLD rating on HDFC AMC with a lower target price of Rs4,200 (Rs4,750 earlier) or ~27x FY26F EPS, largely due to the higher yield pressure that we now expect,” the firm said in a report.
