HDFC Asset Management Company is set to report its earnings for the quarter ended September 2023 on Thursday, October 12. HDFC AMC is the mutual fund investment company and an arm of HDFC Bank.
The revenue growth for asset management companies (AMCs) is a direct function of asset under management (AUM) growth and fund category mix.
Overall AUM for four listed asset managers, namely Aditya Birla Sun Life AMC, UTI AMC, HDFC AMC and Nippon Life AMC, has seen growth in August 2023 compared with June 2023 levels. The share of equity AUM has also improved sequentially for all four asset managers, as per Yes Securities.
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The brokerage house notes that the trend as of September 2023 would have a 2.0% Nifty return overlay over August. It has assumed higher revenue yield estimates QoQ for HDFC AMC and Nippon Life AMC whereas stable for Aditya Birla Sun Life AMC and UTI AMC.
HDFC AMC is estimated to report a revenue of ₹629.5 crore, registering a growth of 15.6% year-on-year (YoY).
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The company’s net profit is expected to rise 11% YoY to ₹404 crore in the quarter ended September 2023. At the operating level, Earnings before interest, tax, depreciation and amortization (EBITDA) is likely to grow 16.7% YoY to ₹472.2 crore, according to Yes Securities.
“We have assumed a sequentially higher EBITDA margin for HDFC AMC due to better yield and higher efficiency due to economies of scale,” the brokerage said.
It expects EBITDA margin will be marginally higher sequentially but other income to be significantly lower sequentially during the quarter
Overall AUM for HDFC AMC grew 7.2% as of August 2023 compared with June 2023. Equity AUM grew by 14.0% over the same period leading to an increase in share of pure Equity AUM QoQ by 2.4% (excluding Balanced and Arbitrage Funds).
“We believe that trends as of September 2023 would be dependent on the trends seen till August while we additionally factor in Nifty Return of 2.0% for September 2023. We pencil in an overall AUM growth of 8.0% QoQ for HDFC AMC,” Yes Securities said.
HDFC AMC shares have given decent returns to investors. HDFC AMC share price is up more than 20% in the last three months and over 26% year-to-date (YTD). The stock has gained over 44% in the last one year.
At 2:45 pm, HDFC AMC shares were trading 0.38% lower at ₹2,750.95 apiece on the BSE.
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Updated: 11 Oct 2023, 02:50 PM IST