HDFC Asset Management Company (AMC) has reported a 22-quarter high in its earnings before interest, taxes, depreciation, and amortization (EBITDA), hitting INR 4.82 billion ($64.8 million) in Q2FY24. This surge was driven by superior business metrics that led to a remarkable 29.6% rise in equity assets under management (AUM) in H1FY24 across all equity segments.
In addition to these impressive figures, InvestingPro Data has revealed that HDFC AMC's revenue growth for the last twelve months (LTM2024.Q1) stands at a robust 25.63%. The company's P/E Ratio (Adjusted) LTM2024.Q1 is calculated to be 23.71, while the Price / Book LTM2024.Q1 is 3.81.
The post-merger AUM accretion is also noteworthy, contributing to the company's robust performance. Expectations of a 12% AUM growth in H2FY24E and 15% in FY25E have been factored into the target multiple of 30x FY25E P/E. This calculation also accounts for a projected yield drop of 2.4 basis points between FY23-25E due to a higher equity mix.
The company has revised its target price to INR 2,783 ($37.5), which includes a core EPS of INR 81.3 and INR 343 per share cash. This adjustment reflects the company's strong performance and positive outlook. It's worth noting that InvestingPro's data indicates a fair value of $79.22 for HDFC AMC.
According to InvestingPro Tips, HDFC AMC has been able to consistently increase its earnings per share and has raised its dividend for 5 consecutive years. This is a testament to the company's strong financial performance and its commitment to rewarding shareholders.
HDFC AMC does face potential challenges that could impact its financial health. These include declining yields due to telescopic pricing, fresh flows, and increasing regulatory competition. These factors may pose risks for the company moving forward, potentially affecting its profitability and overall performance in the coming quarters.
To stay updated with the latest trends and financial metrics of HDFC AMC, consider subscribing to InvestingPro, which offers real-time metrics, insightful tips, and more. For more information, visit InvestingPro Pricing.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.