Mehabe score: 3 G Factor: 5 Piotski Score: 3 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 3.
Description
HDFC Asset Management Company (HDFC AMC) is Promoted by HDFC Ltd (52.72% of share) and Standard Life(21.24%), is one of the largest AMCs in India with total assets under management (AUM) of 406800 Cr. as of Dec 2020. The company offers a large suite of savings and investment products across asset classes.
The company also provides Portfolio Management & separately managed account services to HNIs, family offices, domestic corporates, trusts, provident funds, and domestic and global institutions.
Main Points
Leadership
There are 23 equity-oriented schemes & 90 debt oriented schemes as of March 2020.
HDFC AMC total customer count stands at 56 Lakh as against the total of 2.08 Crore in the market which is 27% of the market share.Site:HDFCAMC
Market Cap:
Rs 62,518 cr
Price:
2935.0
Trading pe:
47.2x
Book-value:
224/share
Div yield:
1.16 %
Earning yield:
2.80%
Face-value:
5.00/share
52week high:
3358.90
52week low:
2070.05
Technical Analysis
Stock trades at 2935.0, below its 50dma 2939.75. However it is trading above its 200dma 2816.12. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 2939.75.
The 52 week high is at 3358.90 and the 52week low is at 2070.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has delivered good profit growth of 22.64% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 33.15%
– has been maintaining a healthy dividend payout of 52.21%
Weakness
– Stock is trading at 13.09 times its book value
-The company has delivered a poor sales growth of 8.04% over past five years.
Competition
– The industry trades at a mean P/E of 22.3x. SBI Cards trades at the industry’s max P/E of 92.89x. HDFCAMC trades at a P/E of 47.2x
– Industry’s mean G-Factor is 4.6 while the mean Piotski score is 7.0. HDFCAMC has a G-Factor of 5 and Piotski scoreof 3.
– Average 1 month return for industry is 3.9%. The max 1- month return was given by Muthoot Finance: a return of 16.28 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 503.0 cr compared to Rs 476.0 cr for period ended Mar 2020, a rise of 5.7%
Operating Profits reported at Rs 396.0 cr for period ended Mar 2021 vis-vis 372.0 for period ended Mar 2020 .
Operating Margins expanded 57.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 14.84 compared to Rs 17.34 for previous quarter ended Dec 2020 and Rs 11.74 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2194.0 cr for period ended Mar 2021 vis-vis sales of Rs 2124.0 cr for the period ended Mar 2020, a growth of 3.2%. The 3 year sales cagr stood at 5.5%.
Operating margins expanded to 82.0% for period ended Mar 2021 vis-vis 80.0% for period ended Mar 2020, expansion of 200.0 bps.
Net Profit reported at Rs 1326.0 cr for period ended Mar 2021 vis-vis sales of Rs 1262.0 cr for the period ended Mar 2020, rising 4.8%.
Company recorded a healthy Net Profit CAGR of 23.1% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 20% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is 3% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is 5% vis-vis a compounded profit growth of 23% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 9.37% vis-vis 9.11% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 10.76% vis-vis 11.34% for Dec 2020
Conclusion
– is almost debt free.
– has delivered good profit growth of 22.64% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 33.15%
– has been maintaining a healthy dividend payout of 52.21% – Stock is trading at 13.09 times its book value
-The company has delivered a poor sales growth of 8.04% over past five years.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 2939.75 and is trading at 2935.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
