InvestorQ : I am holding shares of HDFC AMC and want to add more. Would you recommend buying more shares in the light of the results for the quarter?
shrinidhi Rajan made post

I am holding shares of HDFC AMC and want to add more. Would you recommend buying more shares in the light of the results for the quarter?

Answer
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abhishek nair answered.
1 year ago


Hdfc AMC is the only company from the HDFC group which is small cap in market captalization and seeing there results and also they shifted there business to full trail model. Market capitalization will increase as far as my view stock will touch 3000 very easily. Foreign brokarages also bullish on this stock.


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Riya Dwivedi answered.
1 year ago


The quarterly results were quite impressive as profits grew by 42% to Rs.292 crore. This growth was largely driven by growth in AUM, which increased by 18% on a YOY basis to Rs.356,000 crore. However, you may be aware that the AMC has also guaranteed FMP holder of the fund to the extent of Rs.500 crore and that is a potential risk for the AMC.

What you need to keep in mind is that these AMC companies are valued based on percentage of AUM and the norm of 7-8%. At the current market valuation, HDFC AMC has a market cap of Rs.42,400 crore. If you apply 8% premium valuation to HDFC AMC, it should have a market cap of Rs.28,000 crore. So the stock is already quoting at a 50% premium to its best case valuation. That makes it a steeply valued stock to add and you can just hold on.