AMC stocks in focus: HDFC AMC, UTI AMC, Nippon AMC shares available at good discount – should you invest?

With increase in number of participants in the stock market, the asset management companies (AMCs) mainly HDFC AMC, Nippon Life AMC, UTI AMC are in focus on the back multiple triggers. Besides, these stocks are also available at the discount of up to 35 per cent from its 52-week high.   

According to Zee Business research report, there has been a rise by 19.5 per cent increase in average SIP (Systematic Investment Plan) accounts between October 2021 and February 2022 as compared to April 2021 to September 2021, according to the Association of Mutual Funds in India (AMFI).  

Similarly, the increase in average monthly SIP share has been gained more than 18 per cent between October 2021 and February 2022 as compared to April 2021 to September 2021, the AMFI data said.  

The domestic institutional investors have been on buying spree between October 2021 to February 2022, on the contrary foreign institutional investors continued their sell-off during the said months, the research report said.   

DIIs made purchases of around Rs 1.3 lakh crore against FIIs selling of around Rs 1.88 lakh crore between October 2021 and February 2022.   

As per the data, foreign investors outflows stood at Rs 59,060 crore and DIIs inflows at Rs 47,400 crore since the start of Russia-Ukraine crisis on February 24, 2022, till date, the report pointed out.  

The market analyst and TradeSwift Director Sandeep Jain says the sector is likely to be disrupted by the new-gen tech players such as Sachin Bansal-backed Navi, Groww among others. Besides, interest of investors from SIPs and Mutual Funds to ETFs (Exchange Traded Fund) has been visible, which is also could be termed as negative for the industry, the analyst added. 

The segment being one of the favourites earlier, Jain pointed out, the sector still has huge market and may adapt almost all players from traditional to new-gen. The sector will grow further with rising market participants in the stock market. 

Elara Capital maintained an Accumulate on HDFC AMC with target price to Rs 2,530 apiece (14 per cent upside) – FY24E EV/NOPLAT (Net operating profit less adjusted taxes) of 34x. The stock on Wednesday gained around 3 per cent to Rs 2220 apiece versus 0.5 per cent fall in Sensex. 

Axis Securities maintained Buy rating with a target price of Rs 440 per share (31 per cent upside) on sustained cost controls and improved outlook. It said, long-term prospects of the Indian AMC sector continue to be positive given its low penetration levels vis-à-vis developed countries.