AMCs, broking stocks rally up to 15%; Aditya Birla, UTI, CAMS at new peak

Shares of capital market-related sectors like asset management companies (AMCs) and broking firms are on a roll as they rallied up to 15 per cent on the BSE in Wednesday’s intra-day trade in otherwise a weak market. 

This comes after HDFC AMC and Angel One posted a strong September quarter (Q2FY25) earnings.

Shares of HDFC Asset Management Company (AMC), Nippon Life India Asset Management, Aditya Birla Sun Life AMC, Motilal Oswal Financial Services (MOFSL), Computer Age Management Services (CAMS), IIFL Securities, Nuvama Wealth Management and UTI Asset Management Company have hit their respective new highs. 

These stocks are trading higher in the range of 4 per cent to 15 per cent. In comparison, the BSE Sensex was down 0.18 per cent at 81,670 at 02:14 pm.

 

Among individual stocks, Aditya Birla Sun Life AMC hit a record high of Rs 803.80, as they surged 15 per cent on the back of over 10-fold jump in average trading volumes. A combined 7.07 million equity shares were changing hands on the NSE and BSE.

According to media reports, Aditya Birla Sun Life AMC plans an expansion in its alternatives business with three new fund launches in the private credit space. With rising interest from ultra high net worth individuals (UHNIs) and Indian family offices from Tier-2 cities, the AMC has pegged the opportunity in the performance credit market in India at $100 billion. The AMC expects the private credit segment to grow to $3.5 trillion by 2028 in India.

HDFC AMC also hit a new high of Rs 4,862, rallying 7 per cent after reporting a robust set of numbers for Q2FY25 amid rising equities and broadly steady market share. The stock of the HDFC Group Company was quoting higher for a seventh straight day, surging 18 per cent during the period. 

In Q2FY25, HDFC AMC has reported 9 per cent quarter-on-quarter (Q-o-Q) and 47 per cent year-on-year (Y-o-Y) growth in asset under management (AUM) at Rs 7.69 trillion, driven by growth in equity AUM (10 per cent Q-o-Q and 62 per cent Y-o-Y).

The company’s revenue from operation increased 38 per cent Y-o-Y and 14 per cent Q-o-Q to Rs 887 crore, led by growth in AUM and revival in yield (~2 bps Q-o-Q on closing AUM) at about 46 bps. Operating expense was kept under tight control with 12 per cent Y-o-Y growth, however, higher tax outgo (one-off owing to change in capital gain tax and withdrawal of indexation benefit) resulting in 32 per cent Y-o-Y growth in profit after tax at Rs 577 crore (-4 per cent Q-o-Q).

ICICI Securities said HDFC AMC’s operational performance continues to remain strong coupled with healthy AUM growth. While the stock remains a play on structural growth in the asset management industry in the long run, recent uptick in valuation seems to factor near term triggers, it added.

Shares of Angel One have soared 5 per cent to Rs 3,394, zooming 25 per cent in two days after the company reported a 44 per cent Y-o-Y  jump in its consolidated profit after tax (PAT) at Rs 423.4 crore in Q2FY25. Total income of the stock broking and allied services company grew 8 per cent Y-o-Y at Rs 1,516 crore during the quarter.

Angle One reported continued healthy performance on the back of strong client acquisition (around 3 million customers in Q2FY25), and an increase in client funding book (approximately 25 per cent sequentially). The number of orders increased 5.8 per cent quarter-on-quarter Q-o-Q, primarily led by improvement in the cash segment. With a 19.3 per cent share in overall retail equity turnover, the company's management said it continues to report an improvement in market share across all segments.

Shares of CAMS hit a new high of Rs 4,920, rallied 6 per cent in intra-day trade. The stock surpassed its previous high of Rs 4,911.15 hit on July 31, 2024. The company is India's largest registrar and transfer agent of mutual funds with an aggregate market share of around 68 per cent based on mutual fund average assets under management (AAUM).

With the Mutual Fund industry showing very positive signs as seen by the healthy inflows, an all-time high level of AUMs, healthy SIP flows from disciplined retail investors and a vibrant stock market, the company is expected to retain its growth in the registrar and transfer agent (RTA) business.

Meanwhile, HDFC AMC in its FY24 annual report said that the surge in domestic investments, particularly in mutual funds, is a testament to India’s economic prospects and investor confidence. This trend underscores the potential for exponential growth in our capital markets, similar to the remarkable trajectory witnessed in the US from 1980 onwards.

The current surge in SIPs in India is somewhat resembling the 401(k) movement in the US. As household savings are channelled into mutual funds, the asset management industry is poised for substantial expansion, promising widespread participation in India’s economic growth story.

This positive outlook highlights India’s capacity to become a significant global economic force, fuelled by innovation, investment, and inclusive development. Positioned strategically, HDFC AMC aims to leverage the opportunities within India’s asset management sector, the company said.

Outlook for equities remains positive over the medium to long term considering the structurally robust domestic growth outlook, healthy corporate profitability and supportive government policies. However, it is essential to acknowledge that any sharp slowdown in global growth, escalation of geopolitical tensions and re-acceleration in inflation globally or locally remain the key near-term risks, HDFC AMC said.