Motilal Oswal Recommends Buying Nippon AMC, Sets Target Price at Rs 1040

Motilal Oswal Research Report: Nippon AMC

Key Highlights

• Nippon AMC (NAM) reported a market share of 8.7% in QAAUM, a five-year high, driven by steady net inflows, robust SIP momentum, and a favorable equity mix of 47% in Dec'25.
• NAM's FY26YTD equity share accretion reached 7.1%, the highest in the industry, with a year-over-year increase of 11 basis points.

Financial Performance

Read also: SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire

• NAM's blended yields remained stable at 37 basis points in 3Q, with equity yields at 53 basis points, despite a rise in passive contribution.
• Management expects annual compression of 1-2 basis points due to telescopic pricing, which will be offset by diversified retail flows, SIP growth, and product innovation.

Industry Leadership

• NAM has the largest retail investor base of 22.7 million, accounting for 38.4% of the industry share, underpinned by a highly granular SIP book of INR1.7 trillion.
• The company's ETF platform, with INR2.1 trillion AUM, anchors passive leadership, with a market share of ~20% and dominant folio share of 48%.

Outlook

Read also: SMR Jewels IPO Successfully Lists with Institutional Support

• We expect Nippon AMC to deliver a compound annual growth rate (CAGR) of:
  • 16% in revenue over FY26-28E
  • 17% in EBITDA over FY26-28E
  • 18% in core profit after tax (PAT) over FY26-28E
• We reiterate a BUY rating on the stock with a target price of INR1,040, premised on 38x core FY28E earnings.