AMCs Q3 Results Preview - Yield Stability Is Key For Lifting Sector Multiples: ICICI Securities
AMCs have seen improvement in valuations over the previous quarter on the back of expected yield improvement.
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ICICI Securities Report
Asset management companies yields are likely to remain flat or decline marginally due to increase in equity mix being offset by lower debt and increase in passive assets under management mix in Q3 FY23E.
AMCs have seen improvement in valuations over the previous quarter on the back of expected yield improvement. We reckon it was driven by expectations of increase in debt yields and incremental lower impact of yield dilution from new equity flows.
However, the pressure on yields could sustain as of now. Additionally, lower overall equity flows (excluding index funds) (Rs 289 billion in Q2 FY23 versus Rs 188 billion in Q3 FY23) and systematic investment plan redemptions can be short-term headwinds.
Also, basis AUM movement and incremental lower costs, we expect 5.8% QoQ Ebitda growth and profit after tax at Rs 760 million for Computer Age Management Services Ltd. in Q3 FY23E.
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