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Review By Rudra Shares & Stock Brokers Ltd on July 24, 2018
HDFCAMC has been the largest asset management company (AMC) in India in terms of equity-oriented AUM.
It has consistently been among the top two AMCs in India in terms of total average AUM since the month of Aug. 2008. As on 31st Mar. 2018, it had a total AUM of Rs 2, 91,985 crores.
Also it has been the most profitable AMC in India in terms of net profits since FY13.
Taking into consideration, its trusted brand and strong parentage, consistently delivered ROE of above 40% for last five years to FY2018, consistent profitable growth and diversified product mix distributed through a multi – channel distribution network. On the upper price band of Rs 1100 with EPS of Rs 34.1 for FY18, P/E works out at 32.2 xs, justified as Reliance Nippon is the only listed peer.
We recommend to 'SUBSCRIBE' the issue for long term wealth creation.
The share capital of Company, is set forth below (Amount in Rs except share data)
Authorized Share Capital:-
Issued, subscribed and paid up capital before the Issue:-
Present Issue:-
HDFC Asset Management Company (HDFC AMC), a joint venture between Housing Development Finance Corporation (HDFC) and Standard Life Investments (SLI), is the most profitable asset management company in India in terms of net profits since FY2013 with total AUM of Rs 291985 crores as of end March 2018.
The company has been the largest asset management company in India in terms of equity-oriented AUM since the last quarter of FY2011 and consistently remains among the top two asset management companies in India in terms of total average AUM since August 2008.
HDFC AMC has recorded healthy 25.5% compounded annual growth rate (CAGR) in AUM between March 2013 and March 2018.
As at end March 2018, equity-oriented AUM constituted Rs 1, 49,713 crores and non-equity-oriented AUM at Rs 1, 42,273 crores of total AUM.
The proportion of equity-oriented AUM to total AUM was at 51.3%, which was higher than the industry average of 43.2%, end March 2018.
The market share of total AUM was 13.7% and of actively managed equity-oriented AUM (Rs 144925 crores which excludes index linked and arbitrage schemes) was 16.8% among all asset management companies in India.
The company offers a large suite of savings and investment products across asset classes, which provide income and wealth creation opportunities to its customers. As of March 31, 2018, it offered 133 schemes that were classified into 27 equity oriented schemes, 98 debt schemes (including 72 fixed maturity plans (FMPs)), three liquid schemes, and five other schemes (including exchange-traded schemes and funds of fund schemes)
As of March 2018, independent financial advisors (IFAs) generated 27.6% of total AUM, national distributors 21.0% and banks 17.3%, while the remaining 34.1% was invested in direct plans.
In terms of equity-oriented AUM, IFAs generated 39.2% of equity-oriented AUM, national distributors 24.2% and banks 19.1%, while the remaining 17.5% was invested in direct plans as of March 2018.
Company objectives are to expand their market share and aim to accomplish this through the following strategies:
The total revenue increased from Rs 903.11 crores in FY2014 to Rs 1867.25 crores in FY2018, with a CAGR of 19.9%.
Net profit has grown from Rs 357.77 crores to Rs 721.62 crores during the same period at a CAGR of 19.2%.
Dividend Payout Ratio increased from 41% in FY2014 to 56% in FY2018 and paid a dividend of Rs 336.89 crores in FY2018 compared to Rs 126.20 crores in FY2014.
The net worth of the company stood at Rs 2159.97 crores as of March 2018.
Return on average net worth exceeded 40% every year since FY2014 and was 40.28% for FY2018.
Net cash flow from operating activities increased from Rs 454.8 crores in Fiscal 2017 to Rs 620 crores in Fiscal 2018, with a CAGR of 31.2% in FY14-18.
Depreciation & amortization charges increased by 7.9% CAGR, while other income increased by 24.6% CAGR during FY14-18.
Taking into consideration, its trusted brand and strong parentage, consistently delivered ROE of above 40% for last five years to FY2018, consistent profitable growth and diversified product mix distributed through a multi – channel distribution network. On the upper price band of Rs 1100 with EPS of Rs 34.1 for FY18, P/E works out at 32.2 xs, justified as Reliance Nippon is the only listed peer.
We recommend to "SUBSCRIBE" the issue for long term wealth creation.
Review By Rudra Shares & Stock Brokers Ltd on July 24, 2018
Rudra Shares & Stock Brokers Ltd.
Rudra Shares & Stock Brokers Ltd. is Kanpur based brokerage houses offering services to Retail and HNI customers. Rudra Shares offer a range of financial services which includes institutional and retail brokerage of Equity, Currency, Commodities, Derivatives, Online Trading, Depository Services, Fixed Deposits, IPOs and Mutual Funds Distribution, Wealth Advisory and Research.
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