Buy Nippon Life India Asset Management; target of Rs 860: Prabhudas Lilladher

Prabhudas Lilladher's research report on Nippon Life India Asset Management

NAM saw a stable quarter as QAAuM and core income were largely in-line. Despite strong equity QAAuM growth of 9.1% QoQ and fall in equity share by 37bps QoQ, blended yields were higher to PLe by 0.9bp since (1) company is still benefitting from commission rationalization and (2) ETF yields improved by 2bps QoQ due to sizable growth in higher yielding AuM. NAM continues to gain market share in equity MAAuM as share in net equity flows (ex-NFO) is healthy at 11.4% in Q1FY26 (10.6% in FY25) which is higher than stock MAAuM market share of 7.1%. Over FY25-27E we expect core PAT CAGR of 15.4%.

Outlook

As equity markets have done well in Q1FY26 and net flows have improved and normalized in Jun’25 from Apr/May’25, we increase multiple on FY27E core EPS to 35x from 31x and raise TP to Rs860 from Rs700. Retain ‘BUY’.