Groww, Angel One, Nippon AMC, 360 One, HDFC AMC shares: Buy, sell or hold?

Kotak Institutional Equities in a note on capital market players said the recent 20-60 per cent rally in shares of select brokers, wealth and asset managers has left upside capped across stocks. Capital market companies under Kotak's coverage delivered 30 per cent year-on-year (YoY) revenue growth and 19 per cent earnings growth in the March quarter. The domestic brokerage finds risk-rewards favorable in Billionbrains Garage Ventures Ltd (Groww), HDFC Asset Management Company Ltd (HDFC AMC) and 360 ONE WAM Ltd.

Broking stocks: Target prices

Kotak suggested 'Buy' on both Groww and Angel One. It revised its FY27 estimates for Groww, building in 5 per cent lower orders versus the annualized Q4 run-rate. Kotak revised its target on Groww to Rs220 from Rs 190, expecting Groww to continue compounding across the broking and non-broking segments. 

"Medium-term monetization of newer products is intact, while operating leverage also seems to be playing, with incremental growth in revenues not involving comparable increases in costs," Kotak said.

Its revenue projection for Angel One builds in 11 per cent order CAGR over FY2027-29E, with FY2027E order count implying near-zero growth over Q4 run-rate. 

"We also assume a higher 20 per cent CAGR in the MTF book, although muted trends pose some downside risks to growth assumptions. We expect the share of
non-broking-related revenues to rise to 9 per cent by FY2029E," Kotak Institutional Equities said.

AMC stocks: Price targets 

Among AMCs, Kotak reduced its fair value on ICICI Prudential AMC to Rs 3,250, While the long-term franchise strength remains intact, high valuations cap the upside, which led to the downgrade by a notch, the brokerage said while estimating 17 per cent operating profit growth for ICICI Pru AMC over FY2027-29E. 

On HDFC AMC, the domestic brokerage has raise FY2027-28 earnings estimates marginally and revise its fair value to Rs 2,950 from  Rs 2,750. The upside on the stock is more curtailed after the recent stock price performance, Kotak said.

It retained its 'ADD' rating on Nippon Life AMC with a revised fair value of Rs 1,070 from Rs900 earlier), as the brokerage revised its earnings estimatesupward by 6-8 per cent over FY2027-28E. Kotak suggested 'Add' on UTI AMC and ABSL AMC with targets of Rs 1,100 each.

Kotak said while valuations remain reasonable for UTI AMC at 17 times one-year forward core EPS, the upside depends on clearer catalysts, particularly a sustained improvement in fund performance and net inflows. The stock has a decent dividend yield of 5-6 per cent, it said.

Wealth managers: Target prices

Kotak said wealth players reported steady inflows, even though capital market activities were muted. 360 ONE’s reiteration of net flow guidance of 12-15 per cent of opening Annual Recurring Revenue (ARR) AUM for FY2027 is a positive sign of stable industry trends and a normalized operating environment for the company. The brokerage has 'Add' rating on 360 ONE, with a target of Rs 1,250.