HDFC AMC, UTI AMC - Play On Retail Financialisation: Prabhudas Lilladher Initiates Coverage

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Prabhudas Lilladher Report.We are constructive on Indian asset management company space driven by its heathy growth potential given-assets under management to gross domestic product ratio is 16% for India compared to world average of 63%,financial assets make up for 41% of household savings, although mutual fund allocation is only 2% andlow penetration despite 435 million PAN card holders, while MF unique investors are even lesser at 34 million. Further, the industry is slated to expand by ~13-15% over FY22-26E led by growing investor base, higher disposable income levels and financial savings, deeper regional presence and ease of investing along with digitalisation. We initiate coverage on HDFC Asset Management Company Ltd. with ‘Buy’ rating, as it is regaining lost ground, since market share at 11.5% is improving led by consistent superior performance resulting in improved net flows. Post-merger, HDFC AMC could gain more share of gross MF sales by HDFC Bank Ltd., as currently it accounts for only 25% (peers at 70-98%). Better asset mix and cost control led to healthy profitability with operating yields at 36bps which should sustain. We also initiate coverage on UTI Asset Management Company Ltd. with ‘Buy’ rating. Bolstering investment process resulted in better performance and distributor mind share leading to market share gains in net equity flows and higher BND share in equity distribution. Debt revival is attributable to stronger risk management. Core profits would see a healthy compound annual growth rate of ~14% from FY23-25E driven by operating leverage. Key risks: Industry – Securities and Exchange Board of India could further cut the total expense ratio which would lead to cut in earnings estimates across AMCs. HDFC AMC – lower industry growth and underperformance on the equity and debt side could also affect average AuM growth. UTI AMC – Higher variable staff expenses or fresh hiring would keep employee cost elevated resulting in lower profitability..Click on the attachment to read the full report:.Greenply Industries - Dominant Player In An Industry With Tailwinds: IDBI Capital Initiates Coverage.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

HDFC AMC, UTI AMC - Play On Retail Financialisation: Prabhudas Lilladher Initiates Coverage

We initiate coverage on HDFC Asset Management Company, UTI Asset Management Company with 'Buy' rating.

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