Shares of HDFC Asset Management Company (AMC) surged 7 per cent to hit a new lifetime high of Rs 2,396 on the BSE in Tuesday's early morning trade on strong growth outlook and overseas investors buying. The stock surpassed its previous high of Rs 2,370, recorded on July 19, in intra-day trade.
HDFC AMC, investment manager to HDFC Mutual Fund, is one of the leading asset management companies in the country. In the past three trading days, the stock has outpaced the market by gaining 12 per cent, as compared to 3 per cent rise in the benchmark index.
A sharp run-up in share price of HDFC AMC has helped the company's market capitalisation to top Rs 50,000 crore and touch the high of Rs 50,939 crore in intra-day trade today. Earlier, on July 19, the HDFC Group Company's market-cap touched Rs 50,376 crore, but finally closed lower at Rs 49,256 crore, the BSE data shows.
Thus far in the current financial year 2019-20 (FY20), the stock has zoomed 56 per cent from level of Rs 1,534, after reporting better-than-expected net profit in the quarter ended June 2019 (Q1FY20). In comparison, the Sensex has dipped 3 per cent so far in FY20.
The company reported a 42 per cent year-on-year jump in net profit at Rs 292 crore in Q1FY20. Assets under management (AUM) rose 18 per cent to Rs 3.57 trillion in the quarter under review. Among these, AUM in actively managed equity-oriented funds, i.e. equity-oriented total AUM, excluding arbitrage funds and index funds, grew to Rs 1.69 trillion as on June 30, 2019 with a market share of 16.2 per cent.
“The AMC has been a net beneficiary of a ban on upfront commissions that has resulted in margins moving structurally up. Further, it has been able to largely pass on all total expense ratio reductions to its distributors. This has resulted in average margin levels of 42bps, well above the around 37bps it has delivered over the last 15 years,” analysts at JP Morgan said in result update.
According the shareholding pattern, foreign portfolio investors (FPIs) increased their stake in HDFC AMC for the fourth straight quarter since its listing in August 2018. They raised their holding by 2.12 percentage points or bought additional 603,845 shares of the company through open market.
FPIs holding in HDFC AMC stood at 4.73 per cent as of June 2019, against 4.17 per cent at the end of March quarter. They held 2.61 per cent stake in HDFC AMC on August 3, 2018, data shows.