Buy ICICI Prudential Asset Management Company; target of Rs 3300: Prabhudas Lilladher

Buy

Prabhudas Lilladher's research report on ICICI Prudential Asset Management Company

ICICIAMC saw a strong quarter as (1) equity QAAuM grew by 7.3% QoQ (5.1% for industry) and (2) core income was 6.1% higher to PLe led by 12% lower opex and 2% higher net revenue. MF yield improved slightly QoQ to 47.6bps despite equity growth while share of non-MF revenue was stable at ~9.0%. Led by strong equity performance in 1/3-yr buckets, market share in net equity flows remains highest at 18.2% in 9MFY26 (15.2% in FY25). Hence stock market share in equity increased by 28bps QoQ to 13.9%. ICICIAMC could better navigate the impact of 5bps TER reduction due to lower commission payout and lesser ND share in equity distribution. Conservatively, we have factored a 2.0-3.0bps decline in equity yields over FY26-28E (vs no fall in FY26). Re-appointment of Mr. Sankaran Naren as the Executive Director for a term of 2 years, w.e.f. 1st Jul’26 to 30th Jun’28 mitigates the KMP risk.

Outlook

We raise core EPS for FY27/28E by 5.7/6.8% and raise TP Rs3,300 from Rs3,000 as we tweak multiple on Sep’27 core EPS to 39.0x from 38.0x. Reiterate ‘BUY’.

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ICICI Prudential Asset Management - 1601026 - prabhu