Stock To Hold, TP Rs 3900: Multibagger AMC Declares Highest Rs 70/Share Dividend, Net Up 37%

Leading analysts HSBC and Nuvama have recommended "hold" call to large cap financial services sector stock, HDFC Asset Management Company Ltd with maximum target price at Rs 3900 per share. HDFC Asset Management Company share witnessed decline of 1.51% on BSE at the time of writing the story despite reporting healthy quarterly results and highest ever dividend of Rs 70/share on April 19, 2024. Current market price of HDFC Asset Management Company shares on BSE is Rs 3655.55 apiece. HDFC Asset Management Company shares offered multibagger returns to investors in last 1-year at 106%. More details below:

HDFC Asset Management Company Declares Whopping Dividend: As per the regulatory filing of the company dated April 19, 2024, "Further, the Board of Directors in the said meeting has recommended a dividend of Rs. 70/- per equity share of Rs. 5/- each of the Company, for the financial year ended March 31, 2024, subject to approval of shareholders at the ensuing Annual General Meeting. The dividend if approved by the shareholders, will be dispatched / remitted commencing from the day after the ensuing Annual General Meeting."

HDFC Asset Management Company Q4 Results: The company on April 19, 2024 declared a strong jump of 43.8% in its net profit for March 2024 quarter. HDFC Asset Management Company announced its profit surged to Rs 541 crore for the quarter ended March 2024 as against Rs 376.17 crore in the corresponding quarter of last year. The company's consolidated revenue for the quarter under review soared by 28.55% to Rs 695 crore as compared to Rs 540.9 crore (year-on-year).

Brokerages Recommend Hold Call: Brokerage firms Nuvama and HSBC have assigned "hold" call to HDFC AMC share with highest target price of Rs 3900 per share. Analysts at Nuvama recommended hold rating by slightly reducing the target price to Rs 3900 from Rs 3970 earlier. As per the brokerage firm, despite a surge of equity AUM, blended yields fell 2.7 basis points YoY to 45.4 basis points as a result of a one-time adjustment in yields due to higher-than-expected distributor payouts.

On the other hand, HSBC has hold call on HDFC AMC share and upgraded the target price to Rs 3,505 from Rs 3,410. As per the brokerage house, as the AUM grows, pressure on income yields would drive slower FY25-27 EPS growth than AUM growth. It anticipates the FY2024-2027 EPS compound annual growth rate to be at 12%, slower than the AUM CAGR Of 18%.

HDFC AMC Dividend History: HDFC Asset Management Company declared 6 dividends since March 6, 2019. In the past 12 months, HDFC Asset Management Company announced an equity dividend amounting to Rs 48.00 per share. At the current share price of Rs 3655.55, HDFC Asset Management Company offers a dividend yield of 1.29%.

HDFC AMC Share Performance: The 52-week high price of HDFC AMC share on BSE is Rs 4066.10 apiece (as on 27/02/2024) and 52-week low price is Rs 1728.30 per share (as on 27/04/2023), respectively. The AMC has a market capitalisation of Rs 78,300.59 crore. HDFC AMC shares offered return of 27% in last 6-months, soared 106% in last 1-year, and gained 131% in last 5-years.

About: HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies Act, 1956, on December 10, 1999, and was approved to act as an Asset Management Company for the HDFC Mutual Fund by SEBI vide its letter dated July 3, 2000. In terms of the Investment Management Agreement, the Trustee has appointed the HDFC Asset Management Company Limited to manage the Mutual Fund. The Company offers a comprehensive suite of savings and investment products ranging from mutual funds, including both actively managed and passive options, to portfolio management services and alternative investment opportunities catering to the needs of a diverse customer base, according to its official website.

Disclaimer:

The stock has been picked from the brokerage report of HSBC and Nuvama. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.