Perhaps this is a cyclical sector rather than a structural steady one…4-5 years of solid upcycle followed by stagnation and in between some temporary blips…a study of listed AMCs from US would give some perspective on long term trends f such firms…
Logic tells us that over very long term, AMCs should do well…
What confuses me is that over the listed history of HDFC AMC – since around Aug 2018 to 2023 so far, market has moved up more than 50%, BSE midcap up by around 45%…but HDFC AMC is flat…so the fact that AUM might have increased significantly by virtue of market movements have resulted in negligible effect on HDFC AMC share price.
One reason for above may be valuation de-rating. HDFC group, like all others, listed both HDFC AMC and HDFC Life at very high valuations it seems leaving very little on table for minority investors till almost 5+ years now…
To me, AMC in particular looks like a structural growth story with very high cyclical undercurrents…
Disc: I maybe wrong in my assessments. Views academic. Have around 1-2% portfolio in HDFC AMC.
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