Analysts continue to back HDFC AMC after strong Q3; expect steady growth

Analysts remain upbeat on HDFC Asset Management Company (HDFC AMC) after the company reported a 20 per cent year-on-year (Y-o-Y) jump in consolidated net profit to ₹769.42 crore for the third quarter of the financial year 2025-26 (Q3FY26).    

The fund house's revenue from operations rose 15 per cent year-on-year (Y-o-Y) to ₹1,075.1 crore from ₹934.63 crore in Q3FY26. The NBFC said its operating profit for the quarter stood at ₹855.7 crore, up from ₹747.2 crore in the same quarter last year. Assets under management (AUM) grew 19 per cent Y-o-Y to ₹9.2 trillion as of December 31, 2025, from ₹7.76 trillion a year earlier.  

Brokerages maintain bullish outlook

Following the results, brokerages have expressed confidence in HDFC AMC’s growth prospects. Analysts at Nomura, PL Capital, and Elara Capital have maintained positive views on the company, describing it as a high-quality, equity-led compounder with strong operating leverage and resilient profitability, even amid changes in the Total Expense Ratio (TER) regulations. 

 

Despite some near-term challenges expected due to the Securities and Exchange Board of India’s (Sebi) new TER guidelines, analysts believe HDFC AMC remains well-positioned for sustained growth.

 

Nomura and PL Capital have both retained their 'Buy' rating on the HDFC Asset Management Company (HDFC AMC) stock, while Elara Capital has upgraded its rating to 'Buy' from 'Accumulate.'  ALSO READ | HDFC Life Q3 growth holds firm, margins set to recover; analysts bullish

Here’s what brokerages said on HDFC AMC:

Elara Capital – Upgrades to Buy | Target Price: ₹3,100

Elara Capital has upgraded its rating on HDFC AMC to 'Buy' from ‘Accumulate,’ noting that the core performance is in line, while other income streams also remain strong. The brokerage also pointed out that valuations now appear reasonable, given that the stock has corrected by approximately 9 per cent since their initial coverage, while the franchise value and business fundamentals remain intact.

 

Elara has raised its target price to ₹3,100 (from ₹3,015), as it rolls forward by a quarter. “Our target price implies 40x Dec-27E core PAT (36x consolidated PAT). Our earlier estimates remain largely unchanged,” said the analysts in their research note.

 

On the regulatory changes, analysts said they are likely to have a limited impact on HDFC AMC. “Recent regulatory changes may adversely affect larger schemes. However, smaller schemes stand to benefit from redefined AUM slabs that could allow higher TER, potentially offsetting the impact. Overall, the impact is expected to be fairly limited,” said the analysts.

Nomura – Retains Buy | Target Price: ₹2,950

Global brokerage Nomura has retained its 'Buy' rating on HDFC AMC, with a revised DCF-based target price of ₹2,950, down from ₹3,000. The revised target price implies a Dec-27F P/E of 34x (compared to 30x at the current market price).

 

“We remain constructive on HDFC AMC due to its strong growth potential, solid distribution network, and top-tier profitability. We reaffirm 'Buy' with a revised target price of ₹2,950, implying a Dec-27F P/E of 34x,” Nomura said in its report.

 

The brokerage now incorporates the impact of the new TER regulations, which have led to a reduction in the target multiple. Nomura also noted that HDFC AMC’s operating profit was 3 per cent above its estimated figures, while operating revenue was in line with the brokerage's expectations.  The brokerage anticipates an AAUM CAGR of 16 per cent and an operating profit CAGR of 14 per cent over FY26-28F.  ALSO READ | Nomura cheers Indian Hotels buying stakes in Brij Hospitality; here's why

PL Capital – Maintains Buy | Target Price: ₹2,950

PL Capital has maintained its 'Buy' rating on the stock, citing a strong quarter for HDFC AMC in Q3FY26, driven by lower operating expenses and slightly better revenue. The brokerage highlighted that HDFC AMC’s net equity flows remain strong, helping the company gain market share.

 

The brokerage has raised its core EPS estimates for FY27/28E by around 1.7 per cent and kept its target price unchanged at ₹2,950, while adjusting the multiple on core September ’27 EPS to 37.0x from 37.5x. Analysts have factored in a 2.5-3.0bps decline in equity yields over FY26-28E (compared to a 0.8bps fall in FY26).

 

“Given its strong pedigree and superior 3-year performance, HDFC AMC could benefit from increased flows. While the industry may face a dip in profitability due to Sebi’s directives on TER, we expect HDFC AMC to pass on the impact to industry participants and protect its own profitability,” the brokerage said in its report.

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(Disclaimer: The views and investment tips expressed by the brokerages in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.)