HDFC Asset Management Company Limited Just Recorded A 6.7% Revenue Beat: Here's What Analysts Think

Simply Wall St · 10/18 00:12

HDFC Asset Management Company Limited (NSE:HDFCAMC) just released its quarterly report and things are looking bullish. The company beat expectations with revenues of ₹11b arriving 6.7% ahead of forecasts. Statutory earnings per share (EPS) were ₹26.89, 4.6% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on HDFC Asset Management after the latest results.

View our latest analysis for HDFC Asset Management

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NSEI:HDFCAMC Earnings and Revenue Growth October 18th 2024

Following the latest results, HDFC Asset Management's 14 analysts are now forecasting revenues of ₹39.9b in 2025. This would be a notable 8.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 8.8% to ₹112. Before this earnings report, the analysts had been forecasting revenues of ₹38.9b and earnings per share (EPS) of ₹109 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

It will come as no surprise to learn that the analysts have increased their price target for HDFC Asset Management 6.3% to ₹4,781on the back of these upgrades. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic HDFC Asset Management analyst has a price target of ₹5,450 per share, while the most pessimistic values it at ₹3,600. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting HDFC Asset Management's growth to accelerate, with the forecast 18% annualised growth to the end of 2025 ranking favourably alongside historical growth of 9.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that HDFC Asset Management is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards HDFC Asset Management following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for HDFC Asset Management going out to 2027, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for HDFC Asset Management that you should be aware of.