Mehabe score: 2 G Factor: 4 Piotski Score: 6 The stock has a rating HOLD. 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 4 and Piotski score of 6.
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. Site:HDFCAMC Main Symbol:HDFCAMC
Stock trades at 2259.0, below its 50dma 2513.53 and below its 200dma 2726.77. The stock remains bearish on technicals
The 52 week high is at 3365.00 and the 52week low is at 2239.40
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 10.06 times its book value
-The company has delivered a poor sales growth of 8.04% over past five years.
-Promoter holding has decreased over last 3 years: -13.93%
Competition
– The industry trades at a mean P/E of 25.9x. SBI Cards trades at the industry’s max P/E of 74.25x. HDFCAMC trades at a P/E of 35.3x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 6.0. HDFCAMC has a G-Factor of 4 and Piotski scoreof 6.
– Average 1 month return for industry is 1.2%. The max 1- month return was given by Cholaman.Inv.&Fn: a return of 23.72 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 550.0 cr compared to Rs 482.0 cr for period ended Dec 2020, a rise of 14.1% .
vis-vis 386.0 for period ended Dec 2020 .
Operating Margins contracted -481.0 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 414.0 cr for period ended Dec 2021 and operating profit margin at 75.3 % for same period.
The EPS for quarter ended Dec 2021 is Rs 16.87 compared to Rs 16.16 for previous quarter ended Sep 2021 and Rs 17.34 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2102.0 cr for period ended TTM vis-vis sales of Rs 2194.0 cr for the period ended Mar 2021, a fall of 4.4%. The 3 year sales cagr stood at 0.4%.
Operating margins shrank to 76.0% for period ended TTM vis-vis 82.0% for period ended Mar 2021, contraction of 600.0 bps.
Net Profit reported at Rs 1366.0 cr for period ended TTM vis-vis sales of Rs 1326.0 cr for the period ended Mar 2021, rising 2.9%.
Company recorded a healthy Net Profit CAGR of 13.6% 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 -27% on a 1 Year basis vis-vis a return of 17% over the last 3 Years. – The compounded sales growth on a TTM bassis is 15% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is 8% vis-vis a compounded profit growth of 23% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 10.54% vis-vis 8.95% for Sep 2021 – Public shareholding has fallen for the period ended Dec 2021. The Dec 2021 public holding stood at 11.19% vis-vis 14.62% for Sep 2021
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 10.06 times its book value
-The company has delivered a poor sales growth of 8.04% over past five years.
-Promoter holding has decreased over last 3 years: -13.93%
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains below its 50 DMA 2513.53 and is trading at 2259.0. Shows a near term lack of buying interest.
