AMC shares scale 52-week highs; HDFC, Nippon, Aditya Birla rally up to 5%

Shares of asset under management (AMC) companies were in demand on Tuesday as robust systematic investment plan (SIP) inflows helped sustain assets under management (AUM) growth momentum in January.

Shares of asset under management (AMC) companies were in focus, rallying up to 5 per cent in intra-day deals on Tuesday as robust systematic investment plan (SIP) inflows helped sustain assets under management (AUM) growth momentum in January. In the process, select stocks also hit their respective 52-week highs.

Among individual stocks, HDFC Asset Management Company surged 5 per cent to Rs 4,066, followed by Nippon Life India Asset Management Company - up 4 per cent to Rs 542.55 and Aditya Birla Sun Life AMC (3.4 per cent at Rs 521.70) on the BSE. In comparison, the S&P BSE Sensex was down 0.02 per cent at 72,773 at 10:08 AM.

Thus far in the current calendar year 2024 (CY24), these stocks have outperformed the market by surging between 10 per cent and 27 per cent, as against less than 1 per cent rise in the benchmark index.

HDFC AMC hit a record high in intra-day trades today and has zoomed 27 per cent thus far in CY24. While, thus far in financial year 2023-24, the market price of the company has more-than-doubled or skyrocketed 138 per cent.

HDFC AMC is Investment Manager to HDFC Mutual Fund, one of the largest mutual funds in the country with a closing AUM of Rs 5.75 trillion as on December 31, 2023.

HDFC AMC has been witnessing a consistent surge in equity funds' market share amid scheme-level outperformance, which has been the key driver of its strong earnings growth.

The SIP book of the company also witnessed a significant improvement, with SIP AUM at Rs 1.28 trillion (+15.9 per cent qoq) and a customer base of more than ~6.81 million (+17.4 per cent qoq) in December quarter (Q3FY24). The rise in SIP portfolio, with a consistent surge in SIP AUM, provides further confidence in HDFC AMC’s ability to manage the healthy growth trend in AUM even in the coming quarters, according to analysts at InCred Equities.

“We continue to appreciate the strong scheme-wise delivery provided by the company which, in turn, has resulted in a surge in equity funds’ AUM and an improvement in market share for the AMC. This will also support yields and profitability in the coming quarters. However, post recent rise, we believe that most positives are already factored in the stock price and there is a limit to further upside,” the brokerage firm had said in the Q3 result update. The stock however, was trading above brokerage firm’s target price of Rs 3,550 per share.

Meanwhile, equity mutual fund (MF) schemes (ex-arbitrage) inflows surged to Rs 32,000 crore in January 2024 (vs. Rs 21,500 crore in December 2023). Within equity, the inflows continue to be driven by uptick in multi/flexi cap schemes (Rs 5,500 crore vs Rs 2,900 crore MoM) and steady inflows in mid cap (Rs 2,100 crore vs Rs 1,400 crore MoM) and small cap schemes (Rs 3,300 crore vs Rs 3,900 crore MoM), said JM Financial Institutional Securities in sector update.

For the AMCs under brokerage firm's coverage, equity AUM market share for HDFC AMC and NAM witnessed an improvement to 12.88 per cent (+79bps YoY, +5bps MoM) and 6.84 per cent (+49bps YoY, +6bps MoM) respectively, the brokerage firm said.