India's HDFC Asset Management drops; brokerages warn on margin sustainability
BUZZ-India's HDFC Asset Management drops; brokerages warn on margin sustainability ** Shares of HDFC Asset Management Company HDFA.NS down 3.8% at 2,624.5 rupees
** Company's first-quarter consol net profit rises 12% Y/Y to 8.37 billion rupees ($86.88 million) and revenue from operations up 13.6% Y/Y
** HSBC ("Hold": cuts PT from 2,610 rupees to 2,590 rupees) says margin gains weren't sustainable despite improved yields in Q1
** Brokerage notes faster expense growth offset income gains, keeping operating profit flat Q/Q; limited contribution from higher-margin businesses outside mutual funds
** Nomura ("BUY": PT: 3,130 rupees) calls first-quarter asset growth soft, expects yields to normalize in coming quarters
** Forecasts slightly lower AUM CAGR of 20% over FY26-FY29
** CLSA ("Outperform; raises PT from 3,000 rupees to 3,100 rupees) notes operating income growth lagged revenue growth due to employee stock option costs
** YTD, stock down ~4.4%
($1 = 96.3425 Indian rupees)
(Reporting by Mridula Kumar in Bengaluru)
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