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📊 HDFC Asset Management Company (HDFC AMC) – Long-Term Investment Outlook

Lesson 34/225 | Study Time: 15 Min

Course: Top Quality Companies

📊 HDFC Asset Management Company (HDFC AMC) – Long-Term Investment Outlook

🏦 Company Overview

HDFC AMC, part of the HDFC Group, is one of India’s leading asset management companies, managing a wide range of mutual funds across equity, debt, and hybrid categories. Since receiving SEBI approval in 2000, the company has consistently grown its Assets Under Management (AUM) and maintained industry-leading profitability.

🌏 Industry Overview

The Indian asset management industry is poised for robust growth driven by:

Rising retail participation in equities & mutual funds 📈
Increased SIP inflows and financialisation of savings 💰
Strong regulatory framework and investor awareness campaigns
Penetration in Tier-2/3 cities and digital distribution channels 📲

India’s mutual fund industry AUM is expected to grow at ~15% CAGR over the next decade, with equity-oriented funds gaining higher share.

HDFCAMC: Fairvalue:

https://docs.google.com/spreadsheets/d/e/2PACX-1vTYjekcWKM1oWSuu-JeXLi3O6JghVomtlZV9ahR1yswQ-nLAJB3VrlLpreYj09PjA/pubhtml?gid=914618459&single=true

📈 Historical Growth – AUM, Sales, and Profits

Year	AUM (₹ Cr)	Revenue (₹ Cr)	Profit (₹ Cr)	NPM %
FY14	—	903	358	40%
FY18	2,91,985	1,760	722	41%
FY21	3,95,500	1,853	1,326	72%
FY24	6,12,900	2,584	1,940	75%
FY25	7,74,000	3,498	2,458	70%
Trailing FY26	8,28,600	3,691	2,601	70%

🚀 AUM Growth: 165,619 Cr (FY16) → 8,28,600 Cr (FY26 Trailing)
💹 Profitability: Maintains one of the highest margins in the industry.

📊 Valuation History – PE & PBV Ranges

Price-to-Earnings (PE)

Year	Low PE	High PE
FY23	24	37
FY24	19	43
FY25	30	42
Trailing FY26	29	43

Price-to-Book Value (PBV)

Year	Low PBV	High PBV
FY23	5.6	8.7
FY24	5.2	11.7
FY25	9.0	12.8
Trailing FY26	9.3	13.8

📌 Insight: Valuations are currently near the upper historical band, reflecting premium market positioning.

📅 Q1 FY26 Performance Snapshot

Metric	Q1 FY26	Q1 FY25	YoY Growth
AUM (₹ Cr)	8,28,600	6,71,600	23.4%
Revenue (₹ Cr)	968	775	25%
Profit (₹ Cr)	747	604	24%
EPS (₹)	34.95	28.28	24%
Margin (%)	77%	78%	-1%
Market Share (%)	13.1%	13.3%	—

💡 Revenue growth remains strong with minimal cost increases, maintaining superior margins.

🔍 Cost Structure – Q1 FY26

Cost Head	Q1 FY26 (₹ Cr)	Share of Cost	YoY Growth
Employee Expense	109	51%	8%
Other Expenses	84	39%	6%
Depreciation	17	8%	31%
Finance Cost	3.07	1%	33%
Fees & Commission	1.55	1%	72%
Total Cost	214.6	100%	9%

📈 FY26 and Long-Term Estimates

Year	AUM (₹ Cr)	Revenue (₹ Cr)	Profit (₹ Cr)	EPS (₹)	Margin %
FY26E	9,28,800	4,338	3,340	157	77%
FY30E	16,24,477	7,586	4,931	231	65%
FY35E	28,62,884	13,370	8,690	408	65%

💰 Valuation Ranges (PE & PBV Based)

Year	EPS	BV (₹)	Low Price	Fair Value	High Price
FY26E	157	419	₹4,385	₹5,482	₹7,048
FY30E	231	614	₹6,475	₹8,093	₹10,406
FY35E	408	989	₹11,410	₹14,263	₹18,338

📌 Current Price: ₹5,586 – Near mid-range of FY26 valuations.

📦 Portfolio Allocation View

Basis	Weight %
EPS	2.02%
Book Value	1.30%
PEG	2.45%
Actual	1.92%

⚖️ Allocation reflects premium business with stable growth, but high valuations.

📉 Technical View (Based on Attached Chart)

Previous Buy Recommended: ₹1722 🟢
New Buying Zone: ₹3,550
Target (2 Years): ₹6,800 (Partial profit booking)
Dividend Track: 3.2x returns + consistent high yield in last 6 years.

✅ Conclusion – Long-Term Risk & Reward

Positives:

Industry leader with strong brand & distribution network
Sustained high margins & RoE
Large and growing retail investor base
Expanding AUM with market share stability

Risks:

Valuations near upper range historically
Market-linked revenue → sensitive to equity market cycles
Competition from new AMC entrants

🎯 Investor Approach: Accumulate in buying zones, hold for long-term compounding. SIP approach ideal for mitigating valuation risks.

📢 Disclosure

This report is for educational purposes only, based on publicly available information and reasonable assumptions. Not a recommendation. Investors should do their own due diligence.

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Piyush Patel

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