Buy This Asset Management Stock for a 21% Rise in 6 Months: HDFC Securities

Target price

The current market price (CMP) of UTI Asset Management is Rs. 998. Brokerage firm HDFC Securities Recommends has estimated a target price for the stock at Rs. .2%, over a target period of 1 year.

Stock market outlook
Current market price (CMP) Rs.998
Target price Rs.1210
1 year returns 21.20%
Business performance

Business performance

UTI Asset Management’s revenue for Q2FY22 was Rs 2.80 billion up 40.6% YoY and 7.2% QoQ. Operating income increased by 24% with a margin improvement of 626 bps quarter-on-quarter. The company reported higher other income due to a strong MTM gain and a capital gain from exiting the Ascent India fund and a matured Fixed Maturity Plan (FMP). This translated into strong net profit growth of 67.6% YoY and 28.2% QoQ to Rs. 1.99 billion. UTI AMC posted decent results in Q2FY22 with strong net income growth and healthy QAAUM (Quarterly Average Asset under Management) growth.

HDFC Securities Commentary

HDFC Securities Commentary

HDFC Securities said, “We have forecast a 19% CAGR increase for revenue and net income in fiscal year 21-24E. Operating margin is expected to reach 54.6% in fiscal 24E from the current 35% The equity and debt segment will be the key to watch The company has consistently paid healthy dividends to its shareholders Compression of returns due to strong competition despite the higher share of equity in total assets under management should start to recover or a strong inflow could take hold out of the impact.”

About the company

About the company

UTI AMC is the 8th largest asset management company in India by Quarterly Average AUM (QAAUM). It is present in all AUM segments – mutual funds, alternative investment funds (AIFs), retirement business and portfolio management services. The company has increased its assets under management for the past four consecutive quarters on the back of strong performance as well as higher flows overall due to an improved market scenario.

Warning

The above stock was selected from HDFC Securities’ brokerage report. Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technologies, the author, and the brokerage are not responsible for any losses caused as a result of decisions based on the article.

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