Stories
Kotak Recommends Top AMC Stocks for Up to 24% Upside
- •Kotak Institutional Equities initiated coverage on SBI Funds Management, HDFC AMC, and ABSL AMC, with varying recommendations.
- •SBI Funds Management received a 'Buy' rating with a price target of ₹600 per share.
- •HDFC AMC was upgraded to 'Buy' from 'Add', maintaining a price target of ₹2,800 per share.
- •ABSL AMC was downgraded to 'Reduce' from 'Add', with a price target of ₹1,010 per share.
- •Key risks for AMCs include moderating performance, increased competition, and distributor preference for higher-commission products, while sticky SIP flows offer support.
Key Questions Answered
Kotak initiated coverage on SBI Funds Management with a 'Buy' rating and a price target of ₹600 per share. Additionally, the brokerage upgraded HDFC AMC to 'Buy' from 'Add' while keeping its price target at ₹2,800 per share.
Kotak downgraded ABSL AMC to 'Reduce' from 'Add' with a price target of ₹1,010 per share. The brokerage noted key risks for the sector including recent performance moderation, intensifying competition from smaller AMCs, and distributors preferring higher-commission products.
Kotak stated that benign regulatory conditions and sticky systematic investment plan (SIP) flows will offer support over the medium term. However, AMCs face pressures to invest in offshore and alternative offerings, upgrade distribution, and retain talent, alongside elevated sector valuations.
