Check Before You Invest : HDFC Asset Management Company Ltd

Q: Which industry/sub-sector does HDFC Asset Management Company Ltd belong to?

HDFC Asset Management Company Ltd belongs to the BFSI sector, operating specifically within the Finance - Asset Management segment.

Q: Is HDFC Asset Management Company Ltd a good quality company?

HDFC Asset Management Company Ltd is a good quality company, based on a consistently good multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is HDFC Asset Management Company Ltd undervalued or overvalued?

HDFC Asset Management Company Ltd appears Fair, as its key valuation ratios are in line with their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 40.9, Historic Median: 38.74. Price to Book, Current: 12.67, Historic Median: 11.49. Price to Sales, Current: 28.4, Historic Median: 28.02. EV to EBITDA, Current: 30.8, Historic Median: 28.75

Q: Is HDFC Asset Management Company Ltd a good buy now?

HDFC Asset Management Company Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Q: Revenue growth of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd revenue growth is 35.4% for FY-2025, which is above its 5-year CAGR of 11.79%, indicating faster growth.

Q: Gross Profit margin of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Gross profit margin which is the profit after deduction of direct costs, is 95.6% for FY-2025, which is in line with its 5-year median of 95.6%, indicating stable margins.

Q: Operating Profit Margin of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 79.88% for FY-2025, which is above its 5-year median of 75.9% indicating increasing margins.

Q: Net Profit Margin of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Net Profit Margin is 70.36% for FY-2025, is in line with its 5-year median of 70.36%, indicating stable margins. Profitability Metrics. Gross Profit Margin (%), Current: 95.6, Historic Median: 95.6. Operating Profit Margin (%), Current: 79.88, Historic Median: 75.9. Net Profit Margin (%), Current: 70.36, Historic Median: 70.36

Q: Return on Asset of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Return on Asset is 30.2%, which is above its 5-year historical median of 27.6%, indicating improved asset utilization efficiency.

Q: Return on capital employed (ROCE) of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Return on capital employed is 43.3% for FY-2025, which is above its 5-year historical median of 37.7%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Check Before You Invest : HDFC Asset Management Company Ltd

Snapshot

Q.1 Which industry/sub-sector does HDFC Asset Management Company Ltd belong to?

HDFC Asset Management Company Ltd belongs to the BFSI sector, operating specifically within the Finance - Asset Management segment.

Q.2 Is HDFC Asset Management Company Ltd a good quality company?

HDFC Asset Management Company Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is HDFC Asset Management Company Ltd undervalued or overvalued?

HDFC Asset Management Company Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	40.9	38.74
Price to Book	12.67	11.49
Price to Sales	28.4	28.02
EV to EBITDA	30.8	28.75

Q.4 Is HDFC Asset Management Company Ltd a good buy now?

HDFC Asset Management Company Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Total Income growth, NIM, PPOP, RoA and RoE compared to its last 5-year median.
How efficiently has it grown and managed operations?
By checking its Total Asset growth and Cost-to-Income ratio.
How strong is its Capital position and Asset Quality?
By checking its Capital Adequacy Ratio (CAR), GNPA and NNPA.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd revenue growth is 35.4% for FY-2025, which is above its 5-year CAGR of 11.79%, indicating faster growth.

Q.2 Gross Profit margin of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Gross profit margin which is the profit after deduction of direct costs, is 95.6% for FY-2025, which is in line with its 5-year median of 95.6%, indicating stable margins.

Q.3 Operating Profit Margin of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 79.88% for FY-2025, which is above its 5-year median of 75.9% indicating increasing margins.

Q.4 Net Profit Margin of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Net Profit Margin is 70.36% for FY-2025, is in line with its 5-year median of 70.36%, indicating stable margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	95.6	95.6
Operating Profit Margin (%)	79.88	75.9
Net Profit Margin (%)	70.36	70.36

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Return on Asset is 30.2%, which is above its 5-year historical median of 27.6%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Return on capital employed is 43.3% for FY-2025, which is above its 5-year historical median of 37.7%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Return on equity is 33% for FY-2025, which is above its 5-year historical median of 30.1%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Cash conversion cycle is -12 days, below its 5-year historical median of -8 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover (x)	0.43	0.39
ROE (%)	33	30.1
ROCE (%)	43.3	37.7
Cash Conversion Cycle	-12 days	-8 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Debt-to-Equity ratio is 0.00, which is in line with the industry average of 0.00, indicating similar to debt levels in the industry.

Q.10 Debt to cash flow from operations of HDFC Asset Management Company Ltd?

HDFC Asset Management Company Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of HDFC Asset Management Company Ltd?

Q.1 Promoter shareholding and pledge status of HDFC Asset Management Company Ltd?

Promoters hold 52.37% of the HDFC Asset Management Company Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does HDFC Asset Management Company Ltd performance compare with that of its Peers?

Q.1 Revenue growth of HDFC Asset Management Company Ltd vs industry peers?

HDFC Asset Management Company Ltd revenue CAGR is 11.79%, compared to the industry median CAGR of 15.83%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	35.4	15.8
Gross Profit Growth (%)	32.2	17.2
Operating Profit Growth (%)	42.5	16
Net Profit Growth (%)	26.5	17.4

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	0.43	0.64
ROE (%)	33	55.55
ROCE (%)	43.3	71.1
Cash Conversion Cycle (days)	-12.07	-19

Valuation & price assessment

Q.1 Stock return of HDFC Asset Management Company Ltd over the last decade?

Over the last 5 year(s), the stock has delivered a CAGR of 14.15% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	-	14.2%	45%	14.1%

Q.2 Valuation ratios of HDFC Asset Management Company Ltd vs historical?

The current P/E ratio of 40.9 is higher than its historical median of 38.74, indicating that the stock is trading above its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	40.9	38.74	33.16
Price to Book	12.67	11.49	5.67
Price to Sales	28.4	28.02	22.04
EV to EBITDA	30.8	28.75	22.96

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Check Before You Invest : HDFC Asset Management Company Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

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