Shares of mixed asset management companies remain mixed, with NAM-India and HDFC Asset Management Company surging around 100 per cent in the one-year period, while UTI Asset Management and Aditya Birla Sunlife AMC gave a return of 35 per cent and 20.6 per cent, respectively. Shriram Asset Management gave a return of 63 per cent.
These stocks witnessed a mixed trend on Thursday as well. While UTI Asset gained marginally, Shriram AMC slumped 4.25 per cent while shares of HDFC Asset, Nippon Life Asset Management (NAM India) and ABSL AMC fell between 0.03 per cent and 0.4 per cent respectively.
Like the stock performance, analysts are also equally divided both at the industry level and even at the individual stock level, as most see only little headroom for these stocks despite these companies posting relatively strong numbers for the quarter that ended December 2023.
NAM India has reported strong core PBT (23 per cent y-o-y), driven by revenue growth of 20 per cent y-o-y, and expense growth of 15 per cent y-o-y. Kotak Institutional Equities noted in its report that Nippon continues to benefit from its strong fund performance.
“While current valuations have limited upside potential, Nippon could continue to surprise positively in its relative performance versus the industry. Retain ADD with a fair value of ₹550 (₹520 earlier),” Kotak Institutions said in its research report.
Emphasising that the company’s core performance was below estimates, B&K Securities has maintained its Hold rating on the stock with a revised target price of ₹489 against the earlier ₹401. “We have rolled forward our valuation to FY26E and valuing the company at an implied multiple of 24.5x FY26E EPS based on our DCF model, adjusting our estimates for AUM growth, other income and yields,” B&K Securities report stated.
Revising the target price from ₹513 to ₹580, however, downgrading to ‘Hold’ rating from ‘Buy’, BOB Capital Markets said, “factoring in robust equity flows, SIP flows, rising market share and continued ETF leadership, we increase our target P/E multiple from 27x to 28x on FY26E EPS – a 7% premium to the long-term mean.” It added that the core PAT (ex-MTM impact) increased 27 per cent y-o-y to ₹200 crore.
Global advisory firm Haitong has maintained an outperform rating for UTI Asset Management and has valued the company using a two-stage dividend discount model. In its report, Haitong said that UTI AMC’s expense improvement meant that core PBT (excluding other incomes and MTM impact) was up by 31 per cent y-o-y in Q3FY24 and 16 per cent q-o-q. Reported PAT stood at ₹1.9 billion during Q3FY24 and grew 210 per cent y-o-y and ~1.6 per cent q-o-q, mainly because of higher MTM gains and MF revenue.
The advisory firm has increased its target price for the stock from ₹860 to ₹1,090. “Out TP implies FY26 PE of 18.4x. The main risks to our rating and target price are further changes in regulations that could adversely impact the revenue of the company,” it said in a report.
While YES Securities turned Neutral on HDFC Asset with a price target of ₹3,700, Prabhudas Lilladher remained bullish with a Buy call and a price target of ₹3,900.
Meanwhile, Yes Securities has maintained a Neutral stance on Aditya Birla Sunlife AMC stock with a revised target price of ₹525. It was noted that the company’s net equity inflows started to improve on the back of improved fund performance.