Jefferies noted that market share in both equity and debt segments remained stable. However, it flagged a slight slowdown in flows into lower-margin liquid funds, which could weigh on near-term revenue mix.

HDFC AMC In Focus As Jefferies Stays Bullish Despite Margin Pressures Ahead

Jefferies Maintains Buy Rating on HDFC Asset Management

Global brokerage Jefferies has reaffirmed its Buy rating on HDFC Asset Management Company (HDFC AMC) after the company reported a modest earnings beat in the December quarter, despite the presence of regulatory and mix-related pressures that may shape the medium-term outlook.

Key Highlights:

HDFC AMC reported a profit of Rs 770 crore, up 20% year-on-year, and marginally ahead of Jefferies' estimates.
The company's Assets Under Management (AUM) rose 19% year-on-year, supported by healthy equity inflows.
Equity AUM grew 20% and now accounts for 67% of total AUM, reinforcing HDFC AMC's positioning as a predominantly equity-focused fund house.

Valuation and Price Target:

Jefferies has revised the price target to Rs 3,120, based on a valuation multiple of 35 times March 2028 earnings.

Costs and Margins:

While AUM growth remained strong, margins faced pressure, with operating margins declining to 46 basis points, reflecting higher employee costs and investments in business expansion.

Regulatory and Industry Changes:

Jefferies expects regulatory changes to create manageable, but visible, headwinds, including new total expense ratio (TER) caps and changes related to TER exits, which could have a marginal negative impact on profitability.

Outlook and Estimates:

Jefferies trimmed its FY27–FY28 earnings estimates by about 4% and expects AUM to grow at a 22% CAGR over FY26–FY28, while profit growth may moderate to around 13% as margins normalise.