HDFC AMC: 5 Reasons Motilal Oswal Predicts 20% Upside Potential HDFC AMC is gaining renewed attention as Motilal Oswal highlights its strong upside potential, driven by robust systematic investment plan (SIP) growth, high margins, and untapped distribution opportunities. The brokerage firm has positioned HDFC AMC as one of India’s top three mutual fund houses, citing its quarterly average assets under management (AUM) of Rs 9.2 lakh crore and an active equity market share of 13% as of December 2025. Strong Fund Performance and Cost Leadership Motilal Oswal emphasizes HDFC AMC’s profitability, noting its cost-to-income ratio of approximately 19%, significantly lower than peers’ 25–54%. This efficiency translates to a profit after tax to quarterly AUM ratio of around 33 basis points and a return on equity (RoE) exceeding 30%. Operating margins, ranging between 33% and 36%, are among the highest in the industry, supported by a product mix skewed toward equity. Equity-oriented assets accounted for 65.5% of quarterly AUM in FY26’s third quarter, compared to an industry average of 56.5%. SIP Growth as a Compounding Engine The brokerage underscores HDFC AMC’s resilient SIP franchise, with systematic investment plan (SIP) AUM growing 24% year-on-year to Rs 2.2 lakh crore. Quarterly SIP transactions, including systematic transfer plans, rose 24% to Rs 47.3 billion. Motilal Oswal notes that the combination of a strong equity franchise, expanding retail investor base, and consistent SIP flows provides high visibility for incremental AUM growth. HDFC AMC serves 1.54 crore unique investors, representing 26% industry penetration. Individual investors contribute 69% of total monthly AUM, compared to an industry average of 60.1%.#motilal_oswal #hdfc_amc #systematic_investment_plan #equity_market_share #cost_to_income_ratio
HDFC AMC shares rally 4%; MOFSL says valuations reasonable, sees 20% upside Shares of HDFC Asset Management Company surged 4% in trading today, ending a three-day losing streak. The stock opened with a 2% gain at ₹2,300 and reached an intraday high of ₹2,355 before trading near ₹2,343. Motilal Oswal Financial Services reiterated its 'Buy' rating on the stock, citing reasonable valuations and the company’s leadership position in the mutual fund industry. The brokerage set a target price of ₹2,700, implying an upside of nearly 20% from the previous close of ₹2,254.60. Motilal Oswal highlighted strong systematic investment plan (SIP) inflows, which have driven the stock’s performance. The company’s SIP assets under management (AUM) rose 24% year-on-year to ₹2.2 trillion, with retail investors accounting for 69% of total monthly average AUM (MAAUM), compared to the industry average of 60.1%. The firm also noted a growing investor base of 15.4 million unique investors and 27.7 million live accounts as of December 2025. The brokerage emphasized HDFC AMC’s resilient margins, which remain among the highest in the industry at 33 to 36 bps. These margins are supported by operating leverage and disciplined cost management. Motilal Oswal also projected a 17% compound annual growth rate (CAGR) in AUM for the company, with revenue, EBITDA, and profit expected to grow at 15% annually over FY26–28. The firm praised HDFC AMC’s consistent fund performance across different time horizons, which has bolstered distributor confidence and sustained retail inflows. Despite short-term market fluctuations, Motilal Oswal noted that the company’s long-term fundamentals remain strong.#motilal_oswal #nifty_index #hdfc_amc #systematic_investment_plan #mutual_fund_industry
