Correction in stock prices of AMCs turns risk-reward more favourable

The recent correction in AMC stocks follows a sharp rally driven by record gains in assets under management (AUMs), fuelled by the equity market surge, particularly among leading AMCs

A 20-25 per cent correction in the stock prices of asset management companies (AMCs) has made the sector’s risk-reward profile more favourable, even as earnings growth slowed in the third quarter of the current financial year (Q3FY25) and equity market volatility threatens to disrupt the strong inflows into mutual fund (MF) schemes.

 

The Q3 results for AMCs were mixed. HDFC AMC reported a 31 per cent year-on-year (Y-o-Y) growth in profit at Rs 642 crore, marking an 11 per cent increase from the previous quarter. Nippon India AMC registered a modest 4 per cent Y-o-Y growth, while UTI AMC saw