Nuvama Institutional Equities raised the target price for HDFC AMC to Rs 6,530 from Rs 5,840, while maintaining its ‘Buy’ rating on the stock. The brokerage said favourable equity markets, coupled with robust SIP flows, supported equity assets under management (AUM) growth in the first quarter of FY26.
Nuvama on HDFC AMC: Sustained flows
The HDFC AMC has experienced buoyant equity flows and robust SIP flows of Rs 80,500 crore in Q1FY26, and strong industry active equity and hybrid inflows of Rs 82,560 crore. The monthly SIP book grew 25% YoY and 10% QoQ to Rs 4,010 crore. Management also indicated that HDFC AMC continues to capture a higher share of industry flows compared to its current AUM market share, with healthy inflows in both lump sum and SIP segments.
Nuvama on HDFC AMC: Improved market outlook
Not just sustained flows, as the markets witnessed a strong momentum in Q1FY26 (Nifty 50 up 8.5%, Nifty midcap 150 up 15.0%, and Nifty small cap 250 up 17.8%) contributed to a surge in Quarterly Average Assets Under Management (QAAUM). Equity QAAUM grew 23.2% YoY and 7.7% sequentially. Blended yields still improved 0.6 bps YoY despite a reduction of equity in the mix by 10 bps YoY, as yields benefited from recalibration of distributor payout, which was done over Q2FY25. This resulted in revenue expansion of 25% YoY.
Nuvama on HDFC AMC: Strong execution
HDFC AMC has demonstrated robust operating metrics, including a stable active equity market share at 12.8%, a rise in unique individual investors market share to 25%, and improved SIP market share QoQ to 14.7%.
The company’s EBIT grew 30.1% YoY. This strong execution led to a beat of 8.5% versus estimates for adjusted net profit, which grew 23.8% YoY. These factors led Nuvama to raise its estimates for FY26 by 6.7%, FY27 by 7.1%, and FY28 by 5.5% respectively.
Also, HDFC AMC has applied for an SIF license. Plus, the team is currently focused on designing products in line with investment philosophy, strengths, risk management, and market needs. Management indicated that the SIF investment team shall be a combination of in-house and external talent.
