HDFC AMC Share Price Target at Rs 3,000: ICICI Securities
ICICI Securities has reiterated its BUY rating on HDFC Asset Management Co. with a target price of Rs 3,000, implying 25% upside from Rs 2,400 over 12 months. The core franchise held steady in the second quarter of FY27, the brokerage said. Quarterly average assets under management rose 10% to Rs 9.69 lakh crore, although market share eased to 11.1%. Revenue from operations grew 14% to Rs 1,169 crore and operating profit climbed 16% to Rs 907 crore. Net profit rose 4% to Rs 750 crore, or about 12% after adjusting for a tax reversal a year earlier. The target values the stock at about 34 times FY28 earnings.
Q2FY27 Result Update
Asset Management
HDFC AMC Holds Its Course as Cost Discipline Cushions a Softer Share, and ICICI Securities Stays on BUY
One of India's largest fund houses grew a little slower than the industry this quarter, but a richer equity mix and tight spending kept margins healthy.
ICICI Securities, writing under its ICICI Direct Research banner, described the September quarter as a case of a steady core franchise with operating costs doing the heavy lifting for earnings. Analysts Vishal Narnolia and Nivedita Choudhary expect earnings to compound at 13% to 15% a year over FY26-28 and retained their target of Rs 3,000.
Why Profit Rose Only 4%
The headline net profit of Rs 749 crore was up just 4.2% from a year earlier and down 10.6% from the June quarter. Two forces explain the gap between the operating story and the bottom line. Other income fell 26% to Rs 71 crore as weaker markets produced mark-to-market losses, and the year-ago tax line had been flattered by a Rs 46.8 crore provision reversal. Adjusted for that reversal, ICICI Securities puts profit growth at about 12%.
Tug of war: what moved PAT from Q2FY26 to Q2FY27 (Rs crore)
Rope length is the sum of all forces. The knot sits where lift (green) outweighs drag (rose) by Rs 30.3 crore.
Tax: -70.4
Other income: -24.9
Staff cost: -17.9
Depreciation and interest: -2.9
Revenue from operations: +142.8
Lower other operating expenses: +3.6
A Franchise Measured Against the Industry
HDFC AMC's quarterly average assets rose 10% to Rs 9.69 lakh crore, a touch behind the industry's 13%, so overall share slipped about 20 basis points from the June quarter to 11.1%. Excluding exchange-traded funds, share stands at 12.3%. The more profitable actively managed equity book grew 14% to Rs 6.09 lakh crore, holding a 12.7% share.
| Q2FY27 metric | HDFC AMC | Industry |
|---|---|---|
| Quarterly average AUM | Rs 9.69 lakh crore | Rs 87.2 lakh crore |
| YoY growth in average AUM | 10% | 13% |
| Equity-oriented share of AUM | 67.1% | 57.5% |
| Unique investors | 1.77 crore (28% reach) | 6.33 crore |
| Debt AUM share | 13.0% | n/a |
Retail engine intact. Live individual accounts rose 24% to 3.22 crore, and SIP-only market share improved despite volatility. Systematic flows of about Rs 4,800 crore grew only 6%, which management pinned on lower transfer plans rather than weaker SIPs.
Soft spots. Debt assets shrank 13% to Rs 1.62 lakh crore, and share slipped in multi-asset, aggressive hybrid and equity savings funds, where the company has strengthened its fund management and sales effort.
The Yield Table
Despite regulatory changes effective April 2026, yields ticked up slightly on a better asset mix. Each tile below shows a yield in basis points of assets.
Ae
61
Active equity
Eq
58
Overall equity
Db
28-29
Debt
Lq
13
Liquid
Om
36
Operating margin
Management cautioned that three schemes now manage more than Rs 1 lakh crore each, and the slab-based expense structure lowers yields as a scheme grows. On costs, total expenses rose 6.9% to Rs 265 crore, staff costs climbed 14.5% to Rs 142 crore, and the stock-option charge fell to Rs 18.6 crore, with about Rs 79 crore to Rs 80 crore expected for FY27.
Beyond Mutual Funds: The Route Map
ICICI Securities sees newer lines widening the customer base and adding fresh avenues for asset growth. Read the line from top to bottom.
Mutual funds
Closing AUM of Rs 9.21 lakh crore; mid-cap fund above Rs 1 lakh crore, small-cap fund about Rs 40,000 crore. Management says scale is not limiting flexibility.
PMS, SMA and advisory
Closing AUM of about Rs 6.87 lakh crore after the EPFO fixed-income mandate went live. Government mandates carry lower fees.
Alternatives (AIFs)
Commitments of about Rs 4,000 crore at fees of 80 to 90 bps; private credit fund nearing final close.
SIFs (coming soon)
A couple of launches planned over the next two quarters; two senior investment hires made.
Passive
About 50 index funds, ETFs and other strategies.
International
Six inbound funds and two newly launched outbound feeder funds.
ICICI Securities' Estimates
| Rs crore | FY25 | FY26 | FY27E | FY28E |
|---|---|---|---|---|
| Revenue from operations | 3,498 | 4,119 | 4,885 | 5,596 |
| Profit before tax | 3,286 | 3,710 | 4,417 | 5,063 |
| Net profit | 2,461 | 2,859 | 3,313 | 3,798 |
| EPS (Rs) | 57.6 | 66.8 | 77.4 | 88.7 |
| P/E (x) | 41.7 | 35.9 | 31.0 | 27.1 |
| Dividend per share (Rs) | 45.0 | 54.0 | 62.6 | 71.7 |
| Return on equity | 30.3% | 31.0% | 33.6% | 35.9% |
How the Rs 3,000 Target Is Built
The target is a simple area: FY28 earnings per share as the base, the multiple as the height, and the price as the space between them.
Area = target
Rs 3,016 → Rs 3,000
Base: FY28E EPS Rs 88.7
At Rs 2,400, the stock trades at 31 times FY27 and 27.1 times FY28 estimates, so the target asks for a modest re-rating on top of earnings growth. The projected FY27 dividend of Rs 62.6 implies a yield of about 2.6%, a TopNews calculation. Promoters hold 52.3%, foreign investors 24.1% and domestic institutions 14.6%.
Editor's Note
The report's first page puts closing AUM at more than Rs 9.6 lakh crore, but its own snapshot table and call notes show closing AUM of Rs 9.21 lakh crore. The Rs 9.69 lakh crore figure is the quarterly average. This article uses Rs 9.21 lakh crore for closing and Rs 9.69 lakh crore for average AUM.
The variance table labels its sequential comparison column Q1FY26, but the figures, such as Rs 9.32 lakh crore of AUM, match Q1FY27.
The ratio table shows AUM growth of 24% for FY28, while AUM per share on an unchanged share count rises only about 17.5%. The report does not reconcile the two.
The commentary cites total expenses of Rs 262 crore and pre-tax profit of Rs 978 crore; the variance table shows Rs 264.8 crore and Rs 976.7 crore. This article uses the table.
Turbulence to watch
ICICI Securities lists two risks: heightened equity-market volatility and intensifying competition from existing players and new entrants. TopNews adds two drawn from the call: yield compression as large schemes move into lower expense slabs, and continued share loss in hybrid categories.
Sources
ICICI Securities (ICICI Direct Research, Retail Research), HDFC Asset Management Co. Q2FY27 Result Update, Oct. 16, 2026, analysts Vishal Narnolia and Nivedita Choudhary; company disclosures and conference-call remarks cited therein. Figures are in Rs crore as printed. The profit tug of war, yield tiles, route map and target area are drawn from the report's printed figures; the tug-of-war split comes from its variance table. ICICI Securities discloses that associates of its parent, ICICI Bank, operate in asset management.
Disclaimer: Investments in securities are subject to market risks. This TopNews story is based on brokerage research and is for information only; it is not investment advice. Readers should consult a registered adviser before acting.
