Comments
Target: ₹850
CMP: ₹704.65
Consistent focus on strategy towards equities coupled with industry tailwind led to gain in market share at ~8.29 per cent (blended basis) and about 18.3 per cent for ETF bodes well. Consistent scheme performance, robust SIP flows (market share increased 60 bps Q-o-Q at around 12.6 per cent) and accretion in unique customer base (market share at 37.7 per cent) to aid stickiness and thus inflows.
Continued focus on distribution in B-30 locations (contributing 19 per cent of AUM) and emphasis on existing active and passive schemes is expected to aid AUM growth.
Buoyant equities, improved performance and SIP inflows coupled with focus on passive business led to strong growth in AUM and gain in market share. Focus on strengthening distribution, customer accretion and performance is expected to drive AUM traction. Realignment of distribution structure to share impact of TER cut could act a catalyst in near term, limiting pressure of declining yield on bottom-line.
Though the stock has witnessed an uptick in recent past, considering relatively higher business growth without any balance sheet risk, we remain positive on the stock. Valuing the stock at about 33x FY27E EPS, we revise our target at ₹850, and maintain Buy recommendation
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