HDFC Asset Management Company Ltd.

Recommendation SUBSCRIBE BACKGROUND

Price Band Rs.1095– Rs.1100 HDFC AMC is the asset management arm of HDFC Ltd. Promoted by HDFC Ltd. in
Bidding Date 25 - 27 July 1999, Standard Life Insurance (SLI) acquired 26% stake in HDFC AMC in 2001. With
Kotak, Axis Cap, DSPML, organic growth and acquisitions (Zurich India and Morgan Stanley MF) the
Citi, CLSA, HDFC Bank, company has managed to be the market leader across industry parameters. The
BRLM ISec, IIFL, JM Fin, JP company’s total AUM stood at Rs. 2,919.85 billion as of March 31, 2018 growing at
Morgan, Morgan Stanley, a CAGR of 34% since FY01.
Nomura
Registrar Karvy Details and Objects of the Issue
Sector Finance - Investment The entire public issue consists of offer for sale of Rs. 2800 Cr, on the upper band.
Of the 12.01% being offloaded. HDFC Ltd is offering 4.05% stake, while Standard
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Minimum Retail Application

Life Investment is offering the balance 7.96%.
Number of Shares 13
Min. Application Money Rs. 14300 Investment Rationale
Discount to retail N.A  Trusted Brand with strong parentage
 Superior and diversified product mix distributed through a multi-channel
Payment Mode ASBA
distribution network
Cons. Financials (Rs Cr) FY17 FY18
 Strong investment performance supported by comprehensive investment
Total Income 1480 1760 philosophy and risk management
EBITDA 704 966  Consistent market Leadership position in the industry
PAT 550 722  Robust Financial Performance
Lower Upper  Huge investments in balance sheet masks the inherent ROE of the business
Valuations Band Band which is significantly higher than what is reported
Market Cap (Rs Cr) 23,313 23,319
Valuation and Recommendation
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EPS* 34.0 34.0 Over the past 5 years, HDFC AMC has seen strong AUM growth of 25% CAGR
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P/E Ratio* 32.3 32.3 during FY13-18 rising from Rs. 99142 Cr to Rs. 298459 Cr. Revenues and profits at
EV/ EBITDA* 24.1 24.1 a CAGR of 20% and 18% respectively. Positive macro-economic factors and a
Enterprise Value (Rs Cr) 28633.4 28633.4 robust industry growth prediction of ~19% CAGR from FY18-FY23, give the
*calculated on FY18 company ample opportunities to flourish. HDFC AMC enjoys a strong distribution
network, strong parentage, solid brand image and robust financial growth. These
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Post Issue Shareholding Pattern

factors give the company an upper hand over the sole listed player, Reliance
Promoters 82.94%
Nippon AMC and other unlisted players in this space. The company’s consistent
Institutions 5.23% market leadership position, higher mix of high-margin equity oriented AUM and
Public 11.83% consistent RoE of over 30%, which is one of the highest among domestic and
Offer structure for different categories
global peers work in HDFC AMCs favor. We recommend “SUBSCRIBE” to the
issue.
QIB (Including Mutual Fund) 50%
(Rs Cr)
Non-Institutional Investors 15% Financial Snapshot FY15 FY16 FY17 FY18
Retail 35% Net Revenues 1022.4 1442.5 1480.0 1759.8
Post Issue Equity (Rs. in Cr) 21.2 Growth 19% 41% 3% 19%
EBIDTA 591 668 704 966
Issue Size (Rs in Cr) 2788 – 2800
EBITDA Margins 57.8% 46.3% 47.6% 54.9%
Face Value (Rs) 5 PAT 416 478 550 722
Growth 16% 15% 15% 31%
ROCE 56% 62% 56% 49%
Dnyanada K. Vaidya (+91 22 6273 8186) AUMs 1,52,932 1,70,179 2,36,458 2,98,459
Reserch Asoociate AUM Growth 36% 11% 39% 26%
dnyanada.vaidya@nirmalbang.com ROE 37% 42% 39% 33%
P/E @ Rs. 1100 56.1 48.8 42.4 32.3
Source: Company data, NBRR

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 HDFC Asset Management Company Ltd.

Industry Outlook
India has historically been and is expected to remain a savings economy. The gross domestic savings rate (as a % of GDP) is
higher than those of major economies such as the US, the UK, France, Japan and Germany. In the recent past, household
investments in India have seen a transition from investing in physical assets to investing in financial assets. Going ahead, with
incomes on the rise and inflation under control, the household savings rate (as a percentage of GDP) is likely to increase
gradually. GDP growth in India is projected to improve, with control over inflation which is a key structural positive. Lower
inflation gives an impetus to overall savings, as people can save more.

The mutual fund industry’s AUMs have shown a robust growth, growing at 24.9% CAGR during FY13-18. Industry AUMs during
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FY18 stood at Rs. 21.44 trillion as compared to Rs. 7 trillion in FY13. Equity oriented funds grew at 37.3% CAGR during FY13-
18. The equity-oriented funds AUMs jumped from Rs. 1.9 trillion in FY13 to Rs. 9.2 trillion in FY18. This strong growth is
attributable towards higher savings coupled with increasing investor awareness of such products.

Fig 1: Rising share of Individuals in MFs Fig 2: Investor-class share in AUMs

14,000 120%

11,665 Banks/FI, Banks/FI,

12,000 100% 5% 4%

10,000
8,527 80%
7,924 Individuals, Individuals,
8,000 44% 51%
6,158 60%
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5,581
6,000 5,167 FII/FPI, 1%
FII/FPI, 1%
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3,933 40%
3,203 3,537
4,000
Corporate, Corporate,
1,747 20% 50%
2,000 44%

- 0%
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FY14 FY15 FY16 FY17 FY18 FY14 FY18

Individual Investor AUM (Rs. Bn)

Individual Investor Equity AUM (Rs. Bn)

Source: Company Data, NBRR

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 HDFC Asset Management Company Ltd.

Growth in AUM comprises of 3 parts

1) New inflow from SIP

Systematic wealth accumulation has gained significance in the recent months, especially among individual investors.
The total number of SIPs constituted around 41% and 26% of the total equity fund flows (including balanced and
excluding ETFs) in FY17 and FY18, respectively. The SIP book size increased from Rs. 31.2 billion as of April 2016 to a
whopping Rs. 71.2 billion as of March 2018. This is a huge positive for the mutual fund industry, as SIPs aid in building
a healthy long-term asset base.
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Fig 3: Increasing SIP contribution in industry (Rs. Bn)

8000
7000
6000
5000
4000
3000
2000
1000
0
Sep-16

Feb-17

Sep-17

Feb-18
Jun-16

Nov-16
Dec-16

Jun-17

Nov-17
Dec-17
Jul-16

Jul-17
Oct-16

Oct-17
Apr-16

Aug-16

Apr-17

Aug-17
May-16

Jan-17

Mar-17

May-17

Jan-18

Mar-18
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Source: Company Data, NBRR

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2) Lump sum Inflow

A pick-up in economic growth, growing investor base, higher disposable income and investable surplus, increasing
financial savings and government schemes focusing on increasing awareness, ease of investing, digitalization, and
perception of mutual funds as long-term wealth creators, and increasing geographical penetration have not only
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increased the proportion of SIPs, but have also resulted in lump sum investments growing.

3) Market Pricing
The third lever for AUM growth is the increase in prices of the underlying securities. This acts as growth in
realizations. We can reasonably expect the broader stock market indices to rise in line with the nominal GDP growth
rate in the long run (10-12%) and thus this itself should add significantly to AUM growth in the long run.

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 HDFC Asset Management Company Ltd.

Company Background
Incorporated in 1999, HDFC Asset Management Company is one of the most profitable AMCs. It operates as a joint venture
between HDFC Ltd. and Standard Life Investments Ltd. The company offers a large collection of savings and investment
products across asset classes, which provide income and wealth creation opportunities to its clients. This diversified product
mix provides the company, the flexibility to operate successfully across various market cycles, cater to a wide range of
customers from individuals to institutions, address market fluctuations, reduce concentration risk in a particular asset class
and work with diverse sets of distribution partners.

As of March 31, 2018, HDFC AMC offered 133 schemes that were classified into 27 equity-oriented schemes, 98 debt schemes
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{including 72 fixed maturity plans (“FMPs”)} 3 liquid schemes, and 5 other schemes (including exchange-traded schemes and
funds of fund schemes).

Company’s AUM has grown at 25.5% CAGR between FY13 and FY18. The total AUM stood at Rs. 2,91,985 crore as of 31
March, 2018. The equity-oriented AUM and non-equity-oriented AUM constituted Rs.149,713 crore and Rs.142,273 crore,
respectively, of HDFC AMCs total AUM. The actively managed equity-oriented AUM (which excludes index linked and
arbitrage schemes) constituted Rs.144,925 crore of the total AUM as of March 31, 2018. HDFC AMC has a total number of Live
Accounts of 8.10 million as of March 31, 2018. The company had a monthly flow of over Rs.1,150 crore through
approximately 3.16 million systematic transactions as of March 31, 2018.
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 HDFC Asset Management Company Ltd.

Investment Rationale

Superior and diversified product mix distributed through a multi-channel distribution network
HDFC AMC offers a wide range of investment schemes across asset classes catering to various risk return profiles, many of
which have recorded strong and consistent performance compared to industry benchmarks. The company’s diversified
product mix, includes 27 equity-oriented schemes, 98 debt schemes (including 72 FMPs), three liquid schemes, and five other
schemes (including exchange-traded and funds of fund schemes), enables it to operate through various market cycles, cater
to specific customer requirements and reduce concentration risk. As of March 31, 2018, the proportion of equity-oriented
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AUM to total AUM of 51.3% was higher than the overall industry proportion of 43.2%. With respect to debt schemes, the
company offers schemes across the yield curve and with varied credit risks. The debt schemes cater to different risk return
profiles of customers. Overall, the company typically exercises discipline in launching new schemes and prefers to focus on
growing existing schemes.

HDFC AMC offers its customers access to its products and services through an extensive multi-channel sales and distribution
network comprising banks, national distributors and IFAs. As of March 31, 2018, the company served customers in over 200
cities through a pan-India network of 209 branches (and a representative office in Dubai), and service centers of RTA.
Customers also access products and services directly through branches and online channels. Further, as of March 31, 2018,
the company had over 65,000 empaneled distributors across India marketing the entire range of schemes with its largest
distribution partner (HDFC Bank Limited) accounting for 10.3% of the total AUM and 12.1% of their equity-oriented AUMs,
while the second and third largest distributor accounted for 3.2% and 2.6% of the total AUM, respectively. As of March 31,
2018, IFAs, national distributors and banks generated 27.6%, 21.0%, 17.3% of the AUM respectively. The company incessantly
works towards deepening its relationships with its existing distribution partners and expanding the distributor base. Having
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access to a large and diversified distribution network has and will continue to help HDFC AMC build wider individual customer
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franchise.

Trusted Brand with strong parentage

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HDFC AMC enjoys a strong brand image and the trust of its customers, as is evident from the consistent leadership position in
the Indian mutual fund industry. The company also has a strong brand recall among Indian customers, which is attributable to
the strength of the company’s brand and strong parentage. The company benefits from the brand reputation of its
promoters, HDFC and Standard Life Insurance. HDFC is one of India’s leading housing finance companies. HDFC group has
emerged as a recognized financial conglomerate in India with presence in housing finance, banking, life and non-life
insurance, asset management, real estate funds and education finance. SLI is an indirect subsidiary of Standard Life
Aberdeen, one of the world’s largest investment companies, created in 2017 from the merger of Standard Life Plc and
Aberdeen Asset Management PLC. SLI operates within the brand Aberdeen Standard Investments, with its investment arm
managing £575.7 billion of assets as of December 31, 2017, making it one of the largest active managers in Europe.

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 HDFC Asset Management Company Ltd.

Strong investment performance supported by comprehensive investment philosophy

Equity Oriented Funds
Equity-oriented schemes constitute 51.3% of HDFC AMCs total AUM at the end of FY18. The company’s investment
philosophy for equity-oriented investments is based on the belief that over time stock prices reflect their intrinsic
values. HDFC AMC has been able to deliver a strong and consistent performance for the equity-oriented schemes and
view themselves as the market leader for equity-oriented schemes.

CAGR Returns
Benchmark AUMs Rs.
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Equity Oriented Funds since above

CAGR Billion)
inception Benchmark
HDFC Prudence 18.68% 10.29% 8.39% 36,595
HDFC Balanced 16.49% 13.25% 3.24% 20,401
HDFC Equity 19.18% 11.70% 7.48% 20,384
HDFC Mid-Cap 17.25% 12.95% 4.30% 19,342
HDFC Top 200 20.24% 13.96% 6.28% 14,345
HDFC Equity Savings 9.59% 5.74% 3.85% 7,395
Source: Company Data, NBRR

Debt – Oriented Funds

HDFC AMCs fixed income schemes constitute 48.5% of the total AUM as of 31 March 2018. The fixed income
schemes invest in securities including corporate bonds, municipal bonds, mortgage-backed securities, asset-backed
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securities, real estate investment trusts, infrastructure investment trusts and money market instruments. The
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company places its dependence upon the outlook, spreads and yields for the relevant securities for asset allocation
in debt investments. The company’s debt portfolio allocation is initially driven by its focus on safety, liquidity and
returns, which are then fine-tuned to suit the respective investment objectives of the scheme. The company also
evaluates the global and local macroeconomic variables such as growth, inflation, currency and liquidity. The success
of this strategy is evident from the over and above market benchmark returns the schemes have earned since the
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inception of the scheme.

CAGR Returns
Benchmark AUMs Rs.
Debt Oriented Funds since above
CAGR Billion)
inception Benchmark
HDFC Floating Rate Income 8.28% 7.54% 0.74% 18,354
HDFC Corporate Debt Opportunities 9.54% 8.53% 1.01% 13,890
HDFC Medium Term Opportunities 8.86% 8.16% 0.70% 11,427
HDFC Cash Management 7.31% N.A N.A 10,239
HDFC Short Term Opportunities 8.75% 8.24% 0.51% 9,916
HDFC Regular Savings 7.99% N.A N.A 5,283
Source: Company Data, NBRR

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 HDFC Asset Management Company Ltd.

Consistent market Leadership position in the industry

HDFC AMC is the leader in the Indian mutual Fund industry across all industry metrics. The company’s total AUM stood at Rs.
2,91,985 crore as of March 31, 2018 growing at a CAGR of 33.9% since FY01. HDFC AMC has been the largest asset
management company in India in terms of equity-oriented AUM since the last quarter of FY11 and has consistently been
among the top two asset management companies in India in terms of total average AUM since the month of Aug ‘08.

The company enjoys a market share of 15.7% of the total industry AUMs and that of actively managed equity-oriented AUM
(which excludes index linked and arbitrage schemes) was 16.8% among all asset management companies in India, as of March
31, 2018. The number of live accounts increased from 4.94 million as of March 31, 2013 to 8.10 million as of March 31, 2018.
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Fig 4: Industry Market Share (FY18) Fig 5: Penetration of Mutual Funds (Country-wise)

120%
101%
Others, 100%
HDFC
16.9%
Mutual 76%
80% 65%
Fund, 62% 59% 57% 54%
15.7% 60% 49%
Ipru Mutual
Fund,
40% 30% 26%
14.6%
Next 5
Funds, 20% 11% 11%
24.7% Aditya Birla 0%
SL Mutual
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Fund, 9.9%
SBI Mutual Reliance
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Fund, 8.6% Mutual

fund, 9.6%
Source: Company Data, NBRR

The Indian mutual fund industry in heavily under-penetrated. Mutual Fund AUMs constitute only 12.8% of the GDP (vs. 5.6%
in FY00). However, the mutual fund industry has seen a robust growth in the recent past, especially after demonetization
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with stellar growth in Systematic Investment Plans (SIPs). The industry still has a tremendous potential for growth, considering
the large untapped market, the growing investments from retail investors given higher dispensable income and the tendency
to save.

HDFC AMC’s leading industry and financial position provides them with a robust platform for growth and efficiencies of scale,
and enhances capability of investing in the growth of physical and digital infrastructure, which would further provide the
company access to a larger customer base, and provide improved customer experience. Going ahead, positive industry
outlook coupled with the company’s strengths would enable HDFC AMC to continue the growth momentum and maintain its
market leadership position.

Huge investments lying in balance sheet masks true ROE of the business
Historically, investments have consistently constituted over 80% of the company’s networth/balance sheet. These
investments have accumulated out of the company’s profits over the last many years and have been mainly invested in debt
funds yielding much lower returns than that of the underlying business. If we exclude these investments from the
networth/balance sheet, the core ROE of the company is significantly higher than the reported ROE of 33% as on FY18 (90% of
FY18 networth is deployed in investments).

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 HDFC Asset Management Company Ltd.

Robust Financial Performance

Over the past 5 years, HDFC AMC has consistently maintained the top position in the industry in terms of total revenue and
net profit. This was primarily because of a higher share in equity assets. The company has also recorded a consistent growth
in revenues and reported high EBITDA Margins YoY. Revenues increased at a CAGR of 20% during FY13-18 from Rs. 716 Cr in
FY18 to Rs. 1760 in FY18. EBITDA improved from Rs. 395 Cr in FY13 to Rs. 966 Cr in FY18.
HDFC AMCs total AUM stood at Rs.2,98,459 Cr as on 31 March 2018, of which the equity-oriented AUM and non-equity-
oriented AUM constituted Rs. 1,49,713 Cr (51.3%) and Rs. 1, 42,273 Cr (48.7%), respectively. The proportion of equity-
oriented AUM to total AUM was higher than the industry average of 43.2% as of March 31, 2018. As equity-oriented schemes
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generally have a higher fee structure compared to non-equity-oriented schemes, the product mix helps achieve higher profits.

Fig 6: AUMs and YoY Growth Fig 7: Revenue and EBITDA Margin
350000 50% 2000 70.0%
56.6% 57.8% 54.9%
300000 38.9% 60.0%
35.5% 40% 46.3% 47.6%
1500 50.0%
250000
26.2%
200000 30% 40.0%
1000
150000 13.8% 20% 30.0%
11.3%
100000 7.0% 500 20.0%
10%
50000 10.0%
0 0% 0 0.0%
FY13 FY14 FY15 FY16 FY17 FY18 FY13 FY14 FY15 FY16 FY17

Total AUMs YoY Growth Net Revenue EBITDA Margin

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Source: Company Data, NBRR

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Over the years, equity mutual funds have emerged as one of the most favored investment options, as it is perceived as long-
term wealth creator. Equity-oriented schemes have markedly outperformed traditional investment avenues such as fixed
deposits in the long-run, albeit with volatility. Strong growth in equity markets has attracted substantial flows into equity-
oriented funds, especially since FY15 with more number of households including mutual funds in their savings basket, benign
inflation, falling interest rates and growing individual investor participation (especially through the disciplined SIP route),
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combined with the growing equity markets.

HDFC AMC has the lowest employee related expenses as a % of AAAUM compared to top five asset management companies
in India. While the employee base increased from 582 as of FY13 to 1,010 as of FY18, employee related expenses as a % of
AAAUM decreased from 0.10% in FY14 to 0.06% in FY20. Similarly, while the number of branches increased from 136 in FY13
to 210 in FY18, operating expenses as a % of AAAUM has decreased from 0.09% in FY13 to 0.07% in FY18. The RONW
increased from 41.12% in FY15 to 40.28% in FY18.
Fig 8: Opex and EBITDA Margins (%)

60% 57.8% 0.5%

56.6%
55.2% 54.9%
55% 0.5%
0.46%
50% 47.6% 0.4%
46.3%
45% 0.4% EBITDA Margin

0.34% 0.34% Opex

40% 0.33% 0.3%

35% 0.29% 0.3%

0.27%
30% 0.2%
FY13 FY14 FY15 FY16 FY17 FY18

Source: Company Data, NBRR

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 HDFC Asset Management Company Ltd.

Key Risks and Concerns

Change in Industry regulatory environment

The regulatory environment in which the company operates is subject to change both in the form of gradual evolution and
periodical significant reforms. Any change in the regulations may require the company to make significant changes to the
business practices and policies and could have an adverse effect on the business, financial condition, results of operations and
prospects.

Dependence on Indian capital market

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As of FY18, the company’s total AUMs stood at Rs. 2,91,985 crore, and investment in fixed income securities, equities and
other investments represented ~48.5% and ~51.3%, respectively, of the AUM. Any significant decline in stock prices could
negatively affect net investment income. Downturns in equity markets and in the credit rating can have a negative impact,
due to the decline in the value of funds under management, and profitability. In addition, interest rate fluctuations may
materially and adversely affect the company’s profitability.

Adverse effect on financials if schemes underperform

The performance of schemes is critical to retaining existing customers as well as attracting new customers, which is also an
important factor in the growth of HDFC AMCs AUMs. The performance of schemes also depends on the general market
conditions and existing competition in the market. The investment strategies of certain schemes may lead them to
underperform their relevant benchmarks, or similar investment products provided by competitors. Any such periodic
underperformance, either on an absolute or relative basis, may cause AUMs to decline, which could adversely affect the
investment management fees earned and could impair the company’s revenues. Decline in revenues without a
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commensurate reduction in expenses, may adversely affect profits.

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 HDFC Asset Management Company Ltd.

Peer Comparison
HDFC AMC faces competition from listed domestic players like Reliance Nippon AMC and unlisted players such as Motilal
Oswal AMC, Aditya Birla AMC and ICICI Prudential AMC. Some of the global companies in this business include BlackRock,
Eaton Vance, Wisdom Tree and Ashmore Group.

Domestic Peers (FY18) Global Peers (CY17)

HDFC ICICI Aditya Reliance Motilal
Eaton Wisdom Ashmore
Parameters AMC Pru Birla Nippon Oswal BlackRock
Vance Tree Group
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AMC AMC AMC AMC

(Rs. Crore) (in $ billion)
Revenues 1759.8 1818.6 1261.0 1815.0 668.4 12.5 1.5 0.2 0.3
Profits 721.6 625.6 322.0 522.0 131.4 5.0 0.3 0.0 0.2
Profit Margin% 41% 34% 26% 29% 20% 40% 18% 11% 65%
RoE % 33.4% 76.0% 31.2% 25.0% N.A 16.3% 33% 13.8% 23.9%
P/E (x) 32.3 N.A N.A 30.0 N.A 24.1 23.3 57.1 16.8
P/BV (x) 10.8 N.A N.A 25.6 N.A 2.8 6.6 8.5 3.9
Mkt Cap/AUMs 7.8% N.A N.A 3.6% N.A 1.3% 3.9% 3.4% 3.3%

Source: Company Data, MorningStar.com

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Valuation and Recommendation

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Over the past 5 years, HDFC AMC has seen strong AUM growth of 25% CAGR during FY13-18 rising from Rs. 99142 Cr to Rs.
298459 Cr. Revenues and profits at a CAGR of 20% and 18% respectively. Positive macro-economic factors and a robust
industry growth prediction of ~19% CAGR from FY18-FY23, give the company ample opportunities to flourish. HDFC AMC
enjoys a strong distribution network, strong parentage, solid brand image and robust financial growth. These factors give the
company an upper hand over the sole listed player, Reliance Nippon AMC and other unlisted players in this space. The
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company’s consistent market leadership position, higher mix of high-margin equity oriented AUM and consistent RoE of over
30%, which is one of the highest among domestic and global peers work in HDFC AMCs favor. We recommend “SUBSCRIBE”
to the issue.

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 HDFC Asset Management Company Ltd.

Financials
P&L (Rs. Cr) FY13 FY14 FY15 FY16 FY17 FY18 Balance Sheet (Rs. Cr) FY13 FY14 FY15 FY16 FY17 FY18

Net Revenue 716 859 1022 1443 1480 1760 Sha re Ca pi ta l 25.2 25.2 25.2 25.2 25.2 105.3
% Growth 20% 19% 41% 3% 19% Res erve & Surpl us 677 876 1,095 1,126 1,398 2,055
Empl oyee Cos t 101 112 128 143 158 175 Networth 702 901 1,120 1,151 1,423 2,160
% of Revenues 14.0% 13.0% 12.5% 9.9% 10.6% 9.9% Total Loans - - - - - -
Other expens es 220 261 304 632 619 618 Other non-curr l i a b. 15 15 15 15 1 1
% of Revenues 30.8% 30.4% 29.7% 43.8% 41.8% 35.1% Tra de pa ya bl e 60 148 95 172 96 112
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EBITDA 395 486 591 668 704 966 Other Current Li a b 53 57 82 85 80 98

EBITDA Margin 55.2% 56.6% 57.8% 46.3% 47.6% 54.9% Total Current Liab. 112 205 177 256 176 210
Depreci a ti on 16 8 10 11 12 11 Total Equity & Liab. 829 1,121 1,312 1,423 1,600 2,371
Other Income 68 45 42 52 108 107 Fi xed As s ets & CWIP 28 28 34 32 34 39
Interes t 0 0 0 0 0 0 Inves tments 665 737 651 986 1,237 1,951
PBT 447 522 623 708 800 1063 Deff Ta x As s ets 13 13 13 14 9 10
Ta x 128 165 207 230 250 341 Other non Curr. a s s ets 69 97 175 97 69 62
Tax rate 29% 32% 33% 33% 31% 32% Ca s h 1 1 3 1 1 2
PAT 319 358 416 478 550 722 Debtors 19 15 17 39 85 90
% Growth 12% 16% 15% 15% 31% Other Current a s s ets 35 230 420 254 165 218
EPS (Post Issue) 15.0 16.9 19.6 22.5 26.0 34.0 Total Assets 829 1,121 1,312 1,423 1,600 2,371
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Ratios & Others FY13 FY14 FY15 FY16 FY17 FY18 Cash Flow (Rs. Cr) FY13 FY14 FY15 FY16 FY17 FY18
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EBITDA Ma rgi n (%) 55% 57% 58% 46% 48% 55% EBITDA 395 486 591 668 704 966
PAT Ma rgi n (%) 45% 42% 41% 33% 37% 41% Provi s i ons & Others 5 5 9 4 5 0
ROE (%) 45% 40% 37% 42% 39% 33% Op. profit before WC 400 492 599 672 708 967
ROCE (%) 64% 58% 56% 62% 56% 49% Cha nge i n WC 42 (115) (293) 306 4 (9)
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AUM (Rs. Bn) 991 1128 1529 1702 2365 2984 Les s : Ta x (129) (167) (212) (235) (258) (337)
Growth 7% 14% 36% 11% 39% 26% CF from operations 312 209 95 742 455 620
Turnover Ratios FY13 FY14 FY15 FY16 FY17 FY18 Addi ti on to a s s ets (10) (17) (16) (9) (14) (18)
Debtors Da ys 10 7 6 10 21 19 (Purcha s e)/Sa l e of i nvs t.(86) (38) 112 (297) (169) (620)
Inventory Da ys - - - - - - Di vi dend Recei ved 1 5 8 9 7 3
Credi tor Da ys 30 63 34 44 24 23 CF from Investing (94) (51) 104 (297) (176) (635)
As s et Turnover (x) 1.0 1.0 0.9 1.3 1.0 0.8 Is s ue/Buyba ck of s ha res(90) (11) - (204) 0 423
Valuation Ratios FY13 FY14 FY15 FY16 FY17 FY18 Di vi dend Pa i d (111) (126) (164) (201) (232) (339)
Pri ce/Ea rni ngs (x) 32.3 Ta x on pa i d di vi dend (18) (21) (33) (41) (47) (69)
EV/EBITDA (x) 24.1 CF from Financing (219) (159) (197) (447) (279) 15
Pri ce/BV (x) 10.8 Net Change in cash (1) 0 2 (2) 0 1
Mkt ca p/Sa l es (x) 13.3 Ca s h a t begi nni ng 2 1 1 3 1 1
Mkt ca p/AUM (x) 7.8% Ca s h a t end 1 1 3 1 1 2
Source: Company Data, NBRR

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 HDFC Asset Management Company Ltd.

Disclosure:

This Report is published by Nirmal Bang Securities Private Limited (hereinafter referred to as “NBSPL”) for private circulation. NBSPL is a
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registered Research Analyst under SEBI (Research Analyst) Regulations, 2014 having Registration no. INH000001766. NBSPL is also a registered
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 HDFC Asset Management Company Ltd.

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