Buy Nippon Life India AMC; target of Rs 850: Motilal Oswal

Motilal Oswal's research report on Nippon Life India AMC

Nippon Life India AMC (NAM)’s operating revenue came in at INR5.9b (in line), resulting in a growth of 39% YoY and 3% QoQ. Yields declined to 41.3bp in 3QFY25 from 41.6bp in 2QFY25 and 44.8bp in 3QFY24. For 9MFY25, revenue came in at INR16.6b, recording a growth of 42% YoY. Total opex grew 23% YoY and 3% QoQ to INR2b. Resultant EBITDA stood at INR3.9b in 3QFY25, +49% YoY (in line). EBITDA margin improved 440bp YoY to 65.6%. For 9MFY25, EBITDA grew 53% YoY to INR10.8b.

Outlook

We cut our FY25/FY26/FY27 earnings estimates by 4%/4%/3% mainly on account of lower-than-expected other income and higher expenses. However, due to continued strong fund performance, upside from international flows, and rising market share, we reiterate our BUY rating on the stock with a TP of INR850, based on 36x Sep’26E Core EPS.