Even in the battered trade, like that on Tuesday, when the markets roiled on the back of weak GDP number, HDFC AMC topped the charts and gained. While the stock has run up to 70% in price in the ongoing calendar year, here's the strategy on the stock which you can look upon:
For the stock like HDFC AMC, there has been a downgrade made because of the sharp rise in its market price so far, at the same time, the target price has been set higher at. Rs 2,650 from Rs 2,300 earlier.
Stay put in the stock if you have position in it, do not resort to fresh buying in the scrip:
For those who are already invested in the stock, remaining put is advised but with a stop loss. At the same time fresh buying is not recommended as there seems to be an unfavourable risk reward ratio. Though there is seen to be some more upside in the stock. The stock has been the leader in its space.
The company for the quarter ended June reported growth in profit of 42.2% to Rs. 292 crore with growth in its AUM at 18% y-o-y.
The company has been improving on its branding in the financial domain with free cash flow as well as balance sheet light business. Experts view the stock last closed at 2572.70 and touching 52-week high price of Rs. 2657.10 in today's trade to hit levels of Rs. 2,950 in the short term.
It is to be noted that gains in the stock come despite the ban on upfront commission to agents as well as a cut back on total expense ratio on mutual fund schemes.
What is fuelling rally in AMC stocks?
It is to be highlighted that when the whole of equities have turned to be volatile, one sector that is gaining is AMCs, this is due to the fact that flows into mutual funds have not receded even when the returns on mutual fund schemes as per the latest report have gone below that of PPF and other such government backed schemes.
So, all in all the future of these stocks, depend on the stability of the flows into the fund schemes as any dicey picture can play havoc here as well.