"We reduce our core profit before tax (PBT) estimates by 1-7 per cent to reflect slower AUM
growth and marginal decline in yield estimates. New product addition and investment style diversification will support AUM growth losses though expenses will likely pick up from trough levels due to higher marketing and promotions. ESOP expenses will put some pressure as well," said analysts at Kotak Institutional Equities (KIE) in an earnings review note.
Post the revision, it expects the company to deliver 12-15 per cent earnings growth during FY2022-24E, following 5 per cent growth in FY2021. The brokerage has a Sell rating on the stock with a target price of Rs 2,260 (26.4X EPS June 2023E).
Our cautious stock view reflects medium-term industry challenges, viz. pressure on distributor payouts (from current suppressed levels) and likely shift of investor preferences to passives, KIE analysts added.
Meanwhile, analysts at ICICI Securities continue to remain positive on the stock on the back of strong brand franchise and efficient operational strength shown in FY21.
It has a Hold rating on the stock with a target price of Rs 3,000 per share.
"Post moderation in SIP
flows and outflow from equity schemes in major part of FY21, the industry witnessed a revival in March 2021. HDFC AMC
has followed suit but the continued decline in market share remains a concern. Aiming at accelerating AUM growth and gaining market share, a slew of products launches (thematic funds) are underway, though the outcome of steps undertaken to shore up AUM needs to be closely watched," it said.
At 11.05 am, the stock was trading at Rs 2,812.10, down 1.86 per cent as against a rise of 0.95 per cent in the BSE barometer Sensex.
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