HDFC Asset Management: Sustained Growth, Earnings Resilience, and Product Diversification Support Buy Rating

Bernstein analyst Manas Agrawal assigned a Buy rating on HDFC Asset Management Co. Ltd. yesterday and set a price target of INR3,000.00.

Manas Agrawal has given his Buy rating due to a combination of factors that underscore HDFC Asset Management Co. Ltd.’s solid operating momentum and earnings resilience. He highlights the strong expansion in average assets under management, driven particularly by active equity products, alongside healthy growth in non-equity assets. Despite telescopic pricing pressures, overall fee yields have held steady, reflecting a favorable product mix and earlier commission rationalization, which together support stable revenue generation.
Furthermore, Agrawal points to robust profitability, with double-digit growth in management fees, core operating profits, and net income, aided by disciplined operating costs and strong treasury gains. He also views positively the firm’s strategic push into higher-value alternative products such as PMS, private equity/venture capital, and international funds, including its partnership with IFC in structured credit, as drivers of future growth and diversification. While acknowledging the headwinds from regulatory changes to expense ratios and exit loads, he notes management’s confidence in spreading the impact across the value chain and mitigating margin pressure. Taken together, these dynamics underpin his conviction that the company is well positioned for sustained growth and justify his Outperform/Buy recommendation on the stock.