Dalal Street

HDFC Asset Management Company – HDFC AMC has a strong brand pull (benefitting from parentage), relatively higher proportion of equity assets and continued delivery on fund performance make it one of the best plays to capitalize on the financial savings opportunity in the country.

Big Opportunity
MF AUM is just c.12% of GDP (vs global average of 62%). Long term AUM growth rates have been healthy (18% CAGR over last 19 years) and we see them sustaining in the future. Importantly, share of individual investors in the AUM has been inching up and the uptick in “sticky retail flows’ should shield the industry from cyclical whipsaws in the market. HDFCAMC is one of (more…)

Foreign Institutional Investors have been net sellers in the last two months offloading stocks worth about Rs 24,000 Cr [Aug & Sep] Source: NSDL. Domestic Investors have aggressively bought stocks to ward off free fall in the markets. To us it is a sure sign indication of downward revision of Earnings for FY 2018 from Rs 1626 to Rs 1601 and further down to Rs 1550 as we start getting the September quarter results.

Valuation of Indian Markets:
Instead of the BSE 500, we are now taking into (more…)

Indian small & midcap stocks have witnessed a sharp rally since the lows of Aug 2013 and have outperformed large caps significantly over this period. A large part of this relative outperformance is explained by the price multiple rerating seen over this period. While the price multiple rerating does explain a large part of equity returns in the short run, it is the underlying business performance and earnings growth that should drive performance in the long run.

In fact it’s quite interesting to note that for small stocks, the multiple (more…)