Motilal Oswal Recommends Nippon Life India AMC at Target Price of Rs 1200

Nippon Life India AMC Posts 30% YoY Growth in Operating Revenue for 4QFY26

Nippon Life India AMC (NAM) reported a significant increase in its operating revenue for the fourth quarter of fiscal year 2026 (4QFY26), reaching INR7.4 billion. This marks a 5% beat over expectations and a 30% year-over-year (YoY) growth, along with a 5% quarter-over-quarter (QoQ) increase.

The company's revenue for the fiscal year 2026 (FY26) grew by 21% YoY to INR27.1 billion. NAM's yield on management fees stood at 40.8 basis points (bp) in 4QFY26, compared to 40.7bp in 4QFY25 and 40.2bp in 3QFY26.

Operating expenses (opex) for 4QFY26 came in at INR2.3 billion, up 15% YoY but down 1.5% QoQ. The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) for 4QFY26 stood at INR5.1 billion, a 8% beat over expectations. This represents a 39% YoY/8% QoQ growth, with EBITDA margins at 68.6% (vs. 64.5% in 4QFY25).

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For the fiscal year 2026, EBITDA grew by 25% YoY to INR17.9 billion, with a margin of 66.3%.

Outlook and Recommendations

The research report predicts a compound annual growth rate (CAGR) of 19% in assets under management (AUM), 15% in revenue, 16% in EBITDA, and 16% in profit after tax (PAT) over the fiscal years 2026-2028 (FY26-28E). Based on these projections, the report reiterates a BUY rating on the stock with a target price of INR1,200, equivalent to 42 times the estimated core earnings per share (EPS) for fiscal year 2028 (FY28E).