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 10-year financial track record.

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

HDFC Asset Management Company Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.

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

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 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.3 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.4 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.5 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	0.43	0.39
ROE	33	30.1
ROCE	43.3	37.7
Cash Conversion Cycle	-12 days	-8 days

Q.6 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.7 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.8 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 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

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 above with the industry average of , indicating higher 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

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)

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	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 15.45% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	-	15.5%	45.1%	26%

Q.3 Valuation ratios of HDFC Asset Management Company Ltd vs historical?

The current P/E is higher that its historical median.

Q.4 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	42.17	38.71	33.19
Price to Book	13.06	11.48	5.67
Price to Sales	29.28	28.25	22.04
EV to EBITDA	31.76	28.73	23.11

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