The markets continue to be in a state of flux as they have been for the past 16 months as US trade tariffs, geopolitical escalations and FPI outflows have prevailed on investor sentiments over revival in domestic demand, healthy GDP growth and low inflation. While large-caps experience periodic slides, the broader markets have taken it on their chin with many pockets in the mid- and small-caps spiralling down.
In this regard, one segment has remained resilient despite its strong linkages to the market’s fortunes. Asset and wealth management companies continue to receive inflows.
The ₹80.2-lakh crore mutual fund industry continues to grow at a fairly healthy clip. And the larger players (especially the bank-backed ones) have received a bigger share of SIP and fixed income inflows from investors.
Equity funds’ AUM has risen 19.2 per cent in the last one year to ₹58.7 lakh crore, as of December 2025, while debt fund assets have risen 21.9 per cent to ₹21.5 lakh crore. SIP AUM has risen 22 per cent in the past 12 months to ₹16.6 lakh crore.
And a key beneficiary and one of the largest in the space has been HDFC Asset Management Company (HDFC AMC). The third largest company in the mutual funds space manages ₹9.2 lakh crore as of December 2025.
We had given a hold in the stock in June 2024 at ₹1,966 (pre 1:1 bonus price of ₹3,913), mainly as markets were at all-time highs, and a more careful approach was necessary while approaching market-linked companies, as valuations were not inexpensive. The stock rallied to ₹2,946-levels in August 2025 and has since corrected 18 per cent to ₹2,430-level currently.
At this price, the HDFC AMC stock trades at about 31 times its likely per share earnings for FY27. This multiple is at a discount to ICICI Prudential AMC’s forward price earnings ratio of about 35 times – the company actually came at a discount to HDFC AMC during the IPO in December 2025, but has since rallied 35 per cent from the upper-band price.
On a market capitalisation to AUM basis, HDFC AMC is available at around 11 per cent compared to 13 per cent for ICICI Prudential AMC as per their December 2025 assets.
Given the discount in valuation multiples, investors can accumulate the shares of HDFC AMC from a three-year perspective, especially on declines linked to the broader market.
Solid AUM growth, steep rise in systematic transactions (SIPs + STPs), healthy rise in customer base that sticks on to investments for the long term and expanding market share in actively-managed equity schemes are positives for the company.
In the PMS and alternatives spaces, too, HDFC AMC is making with higher commitments from investors and newer mandates.
In the 9MFY26 period, the company’s revenues from operations increased 18 per cent over 9MFY25 to ₹3,068 crore. Net profits rose 23 per cent over the same period to ₹2,236 crore.
The company’s EBITDA margin has been ranging from 77 per cent to 80 per cent over the years, among the highest in the industry.
Scoring across metrics
HDFC AMC runs several large-sized funds across categories that have done exceedingly well over longer time-frames of 15-20 years. HDFC Balanced Advantage (₹1.08-lakh crore AUM), HDFC Flexicap (₹96,295 crore) and HDFC Midcap (₹92,642 crore) are among the largest in their categories. The large-, large- and mid-cap, focused, small-cap command AUMs of ₹26,000-40,000 crore. Most of its schemes feature in the top quartile of performers over the years.
HDFC AMC has a 12.8 per cent AUM market share in the industry (excluding ETFs) and a 13 per cent share in actively-managed equity-oriented assets.
The equity mix in the company’s AUM is now 66 per cent (December 2025 QAAUM: quarterly average assets under management), as against the industry average of 56.5 per cent.
In recent years, SEBI has looked to steadily reduce charges on mutual funds, especially equity schemes when asset sizes swell. However, despite these lower charges, the company managed a yield (revenue to average AUM) of 46 basis points in 9MFY26, broadly in line with the levels seen in the past two-three years. This yield is the second-highest among listed peers and is among the highest in the industry. The operating margin (as a percentage of QAAUM) has still remained stable or marginally increased at 36 basis points.
Further, HDFC AMC’s SIP AUM stood at ₹2,21,200 crore as of December 2026, up 24.5 per cent year on year, faster than the industry’s growth rate of 22 per cent.
SIP market share has risen from 13 per cent in December 2024 to 13.3 per cent in December 2025.
Monthly systematic transactions (SIP and STP) have risen nearly 24 per cent to ₹4,730 crore as of December 2025.
HDFC AMC’s unique investors increased from 12.6 million in December 2024 to 15.4 million in December 2025. Their share has risen from 24 per cent of the industry to 26 per cent currently. With 96 per cent of the fund house’s transactions being done digitally, operational costs are low.
The company’s alternatives businesses (PMS and AIF) have seen AUM increase from ₹5,000 crore to ₹8,400 crore in the last one year. Recently, the company has been awarded mandates from the Employees’ Provident Fund Organisation (EPFO) and the Seaman’s Provident Fund Organisation (SPFO).
The key risk to the company’s healthy run would be a prolonged bear market and leading to sulking investor sentiments, resulting in lower inflows.
Published on January 24, 2026