BSE: 541729 | NSE: HDFCAMC | Finance - Asset Management | Mid Cap
Past 10 year's financial track record analysis by Moneyworks4me indicates that HDFC Asset Management Company Ltd is a good quality company.
The key valuation ratios of HDFC Asset Management Company Ltd's currently when compared to its past seem to suggest it is in the Fair zone.
The Price Trend analysis by MoneyWorks4Me indicates it is Weak which suggest that the price of HDFC Asset Management Company Ltd is likely to Fall in the short term. However, please check the rating on Quality and Valuation before investing.
Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end.
| Mar'15 | Mar'16 | Mar'17 | Mar'18 | Mar'19 | Mar'20 | Mar'21 | Mar'22 | Mar'23 | Mar'24 | TTM | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROCE % ⓘ | 61.6% | 62.4% | 62.1% | 57.6% | 51.6% | 46.8% | 39.9% | 36.2% | 32.3% | 37.7% | - |
| Value Creation Index ⓘ | 4.5 | 4.5 | 4.5 | 4.1 | 3.6 | 3.2 | 2.6 | 2.2 | 1.9 | 2.4 | - |
Growth Parameters ⓘGrowth Parameters Colour Code Guide ⓘ | |||||||||||
| Sales ⓘ | 1,022 | 1,443 | 1,480 | 1,757 | 1,915 | 2,003 | 1,853 | 2,115 | 2,167 | 2,584 | 3,292 |
| Sales YoY Gr. | - | 41.1% | 2.6% | 18.7% | 9% | 4.6% | -7.5% | 14.2% | 2.4% | 19.3% | - |
| Adj EPS ⓘ | 20.6 | 23.7 | 27.4 | 33.8 | 45.1 | 59.4 | 62.3 | 65.3 | 66.7 | 91.2 | 110.6 |
| YoY Gr. | - | 15.4% | 15.4% | 23.3% | 33.5% | 31.8% | 4.8% | 4.9% | 2.1% | 36.6% | - |
| BVPS (₹) ⓘ | 55.5 | 57.2 | 70.7 | 106.6 | 144 | 189 | 223.7 | 255.9 | 281 | 324.2 | 348.1 |
| Adj Net Profit ⓘ | 416 | 478 | 551 | 711 | 959 | 1,265 | 1,326 | 1,393 | 1,424 | 1,946 | 2,363 |
| Cash Flow from Ops. ⓘ | 94.8 | 742 | 455 | 618 | 894 | 1,285 | 1,085 | 1,254 | 1,149 | 1,620 | - |
| Debt/CF from Ops. ⓘ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - |
CAGR Colour Code Guide ⓘ
| 9 Years | 5 Years | 3 Years | 1 Years | |||||
|---|---|---|---|---|---|---|---|---|
| Sales ⓘ | 10.9% | 6.2% | 11.7% | 19.3% | ||||
| Adj EPS ⓘ | 18% | 15.1% | 13.6% | 36.6% | ||||
| BVPSⓘ | 21.7% | 17.6% | 13.2% | 15.4% | ||||
| Share Price | - | 2.4% | 19.4% | -3.2% | ||||
Performance Ratio Colour Code Guide ⓘ
| Mar'15 | Mar'16 | Mar'17 | Mar'18 | Mar'19 | Mar'20 | Mar'21 | Mar'22 | Mar'23 | Mar'24 | TTM | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Return on Equity % ⓘ | 41.1 | 42.1 | 42.9 | 38.7 | 36 | 35.6 | 30.1 | 27 | 24.5 | 29.5 | 32.9 |
| Op. Profit Mgn % ⓘ | 57.8 | 46.3 | 47.7 | 54.3 | 65.1 | 78.7 | 79 | 75.6 | 74.7 | 75.9 | 79.1 |
| Net Profit Mgn % ⓘ | 40.6 | 33.1 | 37.3 | 40.5 | 50.1 | 63.1 | 71.6 | 65.9 | 65.7 | 75.3 | 71.8 |
| Debt to Equity ⓘ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - |
| Working Cap Days ⓘ | 170 | 127 | 88 | 72 | 56 | 34 | 33 | 30 | 39 | 36 | 417 |
| Cash Conv. Cycle ⓘ | -110 | -64 | -57 | -41 | -31 | -32 | -22 | -8 | -1 | -4 | 404 |
Return on Equity has increased versus last 3 years average to 32.90%
Sales growth is growing at healthy rate in last 3 years 11.74%
Net Profit is growing at healthy rate in last 3 years 13.55%
Sales growth is good in last 4 quarters at 35.16%
No data to display
| Standalone | Consolidated | |
|---|---|---|
| TTM EPS (₹) | 110.6 | 110.5 |
| TTM Sales (₹ Cr.) | 3,292 | 3,293 |
| BVPS (₹.) ⓘ | 348.1 | 347.8 |
| Reserves (₹ Cr.) ⓘ | 7,333 | 7,329 |
| P/BV ⓘ | 10.78 | 10.78 |
| PE ⓘ | 33.93 | 33.94 |
| From the Market | |
|---|---|
| 52 Week Low / High (₹) | 3419.00 / 4862.00 |
| All Time Low / High (₹) | 1248.30 / 4862.00 |
| Market Cap (₹ Cr.) | 80,187 |
| Equity (₹ Cr.) | 106.9 |
| Face Value (₹) | 5 |
| Industry PE ⓘ | 27.5 |
| Pledged * | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
QAAUM (Quarterly Average Assets Under Management) stood at INR 4,481 Bn, reflecting a growth of 4.4% YoY/ 0.4% QoQ led by healthy inflows in the equity-oriented funds. The equity-oriented fund AUM stood at INR 2,445 Bn, an increase of 18.2% YoY/ 2.2% QoQ, contributing 54.4% to the overall QAAUM. The share of debt in the overall AUM was stable QoQ at 26.2% in Q4FY23 but declined from 33.3% in Q4FY22. Revenue from operations grew by 4.8% YoY to 541 Cr.
Net profit for Q4FY23 grew by 9.5% YoY/ 1.8% QoQ at 376 Cr, while for FY23 PAT grew by 2.2% at 1423 Cr., PAT as percentage of AUM was steady at 34 bps.
Results were sub-par driven by positive shift towards equity funds in AUM mix, reducing negative effect of debt fund outflow.
HDFC Asset Management Company is India’s largest mutual fund manager, providing various savings and investment products across asset classes. Company also provides Portfolio Management & separately managed account services to HNIs, family offices, domestic corporates, trusts, provident funds, and institutions.
HDFC AMC commands a 11.0% market share in the mutual fund industry based on Asset Under Management (AUM).
Business Model
AMC works by providing Investment products to Individual and Institutions. These products are Passive (based on index) and Active (based on Research). Major expenses incurred are employee expense, technology costs, distribution & sales cost. AMC business is asset light business, where costs are generally fixed and margins grow as flow of funds into various schemes offered increases. AMC can use operating leverage to improve overall profitability as AUM goes up.
Management
Mr. Navneet Munot is the Managing Director & Chief Executive Officer since February, 2021. He has 28 years of rich experience in Financial Markets. Prior to HDFC AMC, he was the Executive Director and Chief Investment Officer of SBI Funds Management Private Limited, member of executive committee responsible for overseeing investments of over $150 billion across various asset classes in mutual funds and segregated accounts, as well SBI Pension Funds (P) Limited.
AUM Breakup
Company generates revenue based on AUM in different products; each segment fees charged are different. Equity segment provides schemes in both Active as well Passive funds. While Debt & Liquid oriented segment provide Fixed Income products.
Industry Comparison
HDFC AMC has greater share in equity segment over industry which generally has better margins. But intense industry competition, passive products use, and decrease in expense ratio charged as AUM increases make it difficult to maintain margins. An increase in AUM decrease expense ratio charged by 2-3bps generally.
Financials
Sales have grown by 7.4% over FY17-22 period. The sub-par growth was a result of intense competition in the industry leading to falling yields (expense ratio for customers), increasing traction of index funds and higher margins to distributors.
AMC being an asset light business model, Return ratios have remained solid. As AUM increase return ratios are further enhanced.
Future Outlook
As Indian households move towards financialisation of savings along with growing middle class, Mutual Industry is going to rise. This will increase Mutual Fund industry penetration from current 16% of GDP higher vs. Global average of 74% of GDP.
HDFC AMC with good track record and expertise can benefit from this tailwind by increasing flows and better operating leverage. Strength of franchise to withstand and gain market share in difficult and volatile times, places it above peers.
Positive decade projection towards Indian equities makes AMCs attractive with increase in amount of funds and schemes offered to various clienteles.
Risk
· Underperformance of funds to other AMCs and benchmarks.
· General negative sentiment towards equity and lower allocation.
· Higher employee cost associated with Active funds.
· Key fund manager leaving could create outflow from fund.
| PARTICULARS | Mar'15 | Mar'16 | Mar'17 | Mar'18 | Mar'19 | Mar'20 | Mar'21 | Mar'22 | Mar'23 | Mar'24 |
|---|---|---|---|---|---|---|---|---|---|---|
| Income | 1,064 | 1,494 | 1,588 | 1,870 | 2,097 | 2,143 | 2,202 | 2,433 | 2,483 | 3,162 |
| Interest Income | 1,022 | 1,443 | 1,480 | 1,757 | 1,915 | 2,003 | 1,853 | 2,115 | 2,167 | 2,584 |
| Other Income ⓘ | 42 | 52 | 108 | 113 | 182 | 140 | 349 | 318 | 316 | 578 |
| Expenditure ⓘ | 442 | 786 | 788 | 812 | 722 | 490 | 453 | 578 | 612 | 684 |
| Interest Expense ⓘ | 0 | 0 | 0 | 0 | 0 | 9 | 9 | 9 | 10 | 9 |
| Operating Expenses ⓘ | 428 | 761 | 764 | 745 | 643 | 437 | 407 | 516 | 548 | 622 |
| Provisions | 13 | 25 | 24 | 66 | 79 | 44 | 37 | 53 | 54 | 53 |
| Exceptional Items ⓘ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Profit Before Tax ⓘ | 623 | 708 | 800 | 1,058 | 1,375 | 1,653 | 1,749 | 1,855 | 1,871 | 2,478 |
| Taxes ⓘ | 207 | 230 | 250 | 347 | 444 | 391 | 423 | 462 | 447 | 532 |
| Profit After Tax | 416 | 478 | 550 | 711 | 931 | 1,262 | 1,326 | 1,393 | 1,424 | 1,946 |
| Adjusted EPS (₹) | 20.6 | 23.7 | 27.3 | 33.8 | 43.8 | 59.3 | 62.3 | 65.3 | 66.7 | 91.2 |
| Dividend Payout Ratio (%) | 39% | 42% | 42% | 47% | 55% | 47% | 55% | 64% | 72% | 77% |
| PARTICULARS | Mar'15 | Mar'16 | Mar'17 | Mar'18 | Mar'19 | Mar'20 | Mar'21 | Mar'22 | Mar'23 | Mar'24 |
|---|---|---|---|---|---|---|---|---|---|---|
Equity and Liabilities | ||||||||||
| Equity Capital | 1,120 | 1,151 | 1,423 | 2,254 | 3,071 | 4,029 | 4,776 | 5,530 | 6,108 | 7,079 |
| Share Capital ⓘ | 25 | 25 | 25 | 105 | 106 | 106 | 106 | 107 | 107 | 107 |
| Reserves ⓘ | 1,095 | 1,126 | 1,398 | 2,149 | 2,964 | 3,923 | 4,670 | 5,423 | 6,002 | 6,972 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Long Term Borrowings | 2 | 1 | -9 | 5 | 4 | -14 | 128 | 173 | 209 | 220 |
| Current Liabilities | 177 | 256 | 176 | 213 | 149 | 272 | 191 | 178 | 219 | 259 |
| Trade Payables | 95 | 172 | 96 | 112 | 47 | 47 | 26 | 29 | 34 | 39 |
| Short term borrowings | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Liabilities | -95 | -172 | -96 | -112 | -47 | -47 | -26 | -29 | -34 | -39 |
| Total Liabilities ⓘ | 1,298 | 1,409 | 1,590 | 2,472 | 3,224 | 4,287 | 5,095 | 5,880 | 6,537 | 7,558 |
Assets | ||||||||||
| Non Current Asset | 371 | 289 | 271 | 707 | 678 | 818 | 794 | 812 | 800 | 741 |
| Loan Asset | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non Current Asset ⓘ | 371 | 289 | 271 | 707 | 678 | 818 | 794 | 812 | 800 | 741 |
| Current Asset | 928 | 1,119 | 1,319 | 1,765 | 2,546 | 3,469 | 4,300 | 5,068 | 5,737 | 6,817 |
| Current Investment | 489 | 826 | 1,068 | 1,432 | 2,351 | 3,334 | 4,158 | 4,939 | 5,477 | 6,649 |
| Other Current Asset | 439 | 293 | 251 | 334 | 195 | 134 | 142 | 130 | 260 | 168 |
| Total Assets ⓘ | 1,298 | 1,409 | 1,590 | 2,472 | 3,224 | 4,287 | 5,095 | 5,880 | 6,537 | 7,558 |
| PARTICULARS | Mar'15 | Mar'16 | Mar'17 | Mar'18 | Mar'19 | Mar'20 | Mar'21 | Mar'22 | Mar'23 | Mar'24 |
|---|---|---|---|---|---|---|---|---|---|---|
| Cash Flow From Operating Activity ⓘ | 95 | 742 | 455 | 618 | 894 | 1,285 | 1,085 | 1,254 | 1,149 | 1,620 |
| Cash Flow From Investing Activity ⓘ | 104 | -297 | -176 | -633 | -777 | -928 | -483 | -508 | -218 | -547 |
| Cash Flow From Financing Activity ⓘ | -197 | -447 | -279 | 15 | -119 | -332 | -628 | -746 | -930 | -1,066 |
| Net Cash Flow ⓘ | 2 | -2 | 0 | 1 | -1 | 26 | -25 | 0 | 1 | 7 |
| PARTICULARS | Mar'15 | Mar'16 | Mar'17 | Mar'18 | Mar'19 | Mar'20 | Mar'21 | Mar'22 | Mar'23 | Mar'24 |
|---|---|---|---|---|---|---|---|---|---|---|
Operational & Financial Ratios |
||||||||||
| EPS (₹) | 165 | 190 | 219 | 34 | 44 | 59 | 62 | 65 | 67 | 91 |
| DPS (₹) | 65 | 80 | 92 | 16 | 24 | 28 | 34 | 42 | 48 | 70 |
| BVPS (₹) | 444 | 457 | 565 | 107 | 144 | 189 | 224 | 256 | 281 | 324 |
Performance Ratios | ||||||||||
| ROA (%) | 34.5 | 35.3 | 36.7 | 35.0 | 32.7 | 33.6 | 28.3 | 25.4 | 22.9 | 27.6 |
| ROE (%) | 41.1 | 42.1 | 42.8 | 38.8 | 35.1 | 35.6 | 30.2 | 27.3 | 24.9 | 30.1 |
| ROCE (%) | 61.6 | 62.4 | 62.1 | 57.6 | 51.6 | 46.8 | 39.9 | 36.2 | 32.3 | 37.7 |
Valuation Parameters | ||||||||||
| Price/Book(x) | 0.0 | 0.0 | 0.0 | 0.0 | 10.7 | 11.2 | 13.1 | 8.4 | 6.1 | 11.6 |
HDFC Asset Management Company Ltd. (HDFC AMC) is the investment manager to the schemes of HDFC Mutual Fund (HDFC MF). It is India’s most profitable mutual fund manager, leading in actively managed equity-oriented assets under management (AUM). Started in 1999, it was set up as a joint venture between Housing Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited (SLI). During FY18-19 it carried out an initial public offering, and became a publicly listed company in August 2018. It offers a comprehensive suite of savings and investment products across asset classes, which provide income and wealth creation opportunities to its large retail and institutional customer. It has a dominant position in equity investments, with the highest market share in actively managed equity-oriented funds.
Its strengths lie in delivering simple and accessible investment products for the average Indian household. It is the most preferred choice for retail investors, with the highest market share in assets from individual investors. Over one in four Indian mutual fund investors have invested in at least one of its schemes. Its offering of systematic transactions further enhances its appeal to individual customers looking to invest periodically in a disciplined and risk-mitigating manner. Its schemes have weathered multiple market cycles. It works with diverse sets of distribution partners which helps company expand its reach. It has several empanelled distributors which include independent financial advisors, national distributors and banks. It serves its customers and distribution partners in many cities through its network of branches and employees.
Business area of the company
The company offers a large suite of savings and investment products across asset classes, which provide income and wealth creation opportunities to its customers. It also provides portfolio management and segregated account services, including discretionary, non-discretionary and advisory services, to high net worth individuals (HNIs), family offices, domestic corporates, trusts, provident funds and domestic and global institutions.
Products of the company
Certifications, awards and accreditations
Major events and milestones
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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