Nippon Life India Asset Management Ltd. share price forecast

Yesterday Nifty started off almost flat declined gradually and remained sideways for the whole trading session. It eventually closed 0.06% higher in positive. Technically on a daily chart it has formed negative candle with lower shadow indicating range bound movement. It is also trading in a consolidation range past few trading sessions. There is a...

Nippon Life India Asset Management: Revenue was 3.8% below estimates as a result of pressure on revenue yields. Falling market share in the high-margin equity segment, at 6.2% (-17bps), was a double whammy in a falling equity yield environment. We expect NAM to focus on improving performance to recoup its lost market share. Additionally, we expect NAM to benefit from higher credibility to raise HNI/institutional capital. We lower our FY23E/24E earnings by 11%/ 5% to factor in lower margins and expect NAM to deliver FY22-24E revenue/NOPLAT CAGR of 9.3/12.1%. We maintain ADD on the stock with a reduced target price of INR365 (with a lower multiple at 27x Mar-24E EV/NOPLAT, following a derating in the AMC sector even as we roll forward our earnings). TTK Prestige: TTK Prestige's Q1FY23 revenue and EBITDA margin was a miss. Standalone revenue was up 68% YoY (HSIE 77%), clocking 11% three-year CAGR. The revenue growth was primarily led by strong performance in cookware, which was up 18% three-year CAGR. Gross margin contracted 257bps YoY to 42% (HSIE 41.5%). With carrying high cost inventory, we expect RM softening benefits will be majorly visible from Q3FY22. EBITDA margin came in at 13.8% (HSIE 15%). EBITDA was up 13% on three-year CAGR to INR 830mn (HSIE INR 951mn). Although home improvement and new housing theme is expected to sustain, we believe rising competition (renewed Butterfly under Crompton, etc.) will continue to keep earnings for TTK in check. As the earnings upcycle seems to be over, we cut our target multiple to 35x (37x...

Nippon Life India Asset Management: Nippon Asset Management (NAM) printed sequentially flat core revenues at INR3.38bn, in line with our estimates. However, revenue yields continued to trend lower, consistent with industry trends. Market share in the high-margin equity segment moderated further (-9bps QoQ) and continues to remain a structural medium-term concern. We expect NAM to focus on improving its performance in order to recoup its lost market share. Driven by cost optimisation, we expect NAM to deliver FY22-24E revenue/NOPLAT CAGRs of 11%/15%. We maintain our ADD rating with an unchanged target price of INR425 (33x Sep-23E EV/NOPLAT + Sep-22E cash and investments). The stock is currently trading at FY23E/24E EV/NOPLAT of 27.1/22x and P/E of 25.3/21.6x. Bajaj Finance: Bajaj Finance's (BAF) Q4FY22 earnings were in line with our estimates, led by improving asset quality (credit costs at 160bps), partially offset by elevated opex (~5% of AUM). Core AUM growth (ex-IPO financing) remained strong at 26% YoY despite marginal softness in new customer additions (-2% YoY) and new loans disbursed (+15% YoY). With Phase-I of the digital transformation underway and Phase-II in the works (expected in FY23), BAF articulated a further build-out of its omnichannel strategy (web-based platform, in addition to its apps). While these are necessary pivots, we reiterate that incremental portfolio growth from new-to-franchise (NTF) customers is likely to call for higher capital investments without the assurance of either a stronger customer franchise or greater customer stickiness. We make marginal upward tweaks to our FY23/FY24 earnings estimates (1% each) to factor in lower credit costs...

We maintain a BUY with a target price of Rs 410 (25x FY24E EPS), implying an upside of 25% from the CMP.

We maintain our BUY rating with a target price of Rs 440 (30x FY23E EPS).

We maintain our BUY rating with a target price of Rs 485 (32x FY23E EPS).

Long-term prospects of the Indian AMC industry continue to be positive given its low penetration levels vis--vis developed countries. On sustained cost controls and improved outlook, we maintain our BUY rating with a target price of Rs 485 (32x FY23E EPS).

We recommend a BUY with TP of Rs 455/share.

India with an AUM size of | 3.79 lakh crore. The company has a strong distribution network with ~80000 distributors. Market share as on Q1FY22 was at 7.2%...

On sustained cost controls and improved outlook, we maintain our Buy rating with a target price of Rs 455 (30x FY23E EPS), implying an upside of 12%.

Brokers on a one-way streak: Although Phase-3 of the upfront peak margin requirement for cash and derivatives kicked in during the quarter, ADTVs (ex-prop) for cash/derivatives increased +25%/-1% sequentially. The capital markets witnessed an unprecedented monthly addition of 2.4mn new retail investors over the past four months. We expect the larger organised players to see sustained market share gains. Increased retail activity and a market clocking all-time highs have supported higher volumes, thereby boosting broking revenues. Distribution income is also expected to improve sequentially as industry-wide active equity AUM grew 6.5% QoQ. We raise our revenue forecasts for ISEC to build in stronger revenue momentum on the back of higher ADTVs. We maintain our ADD rating on the stock with an increased target price of INR 720 (23x FY23E AEPS). Strong tailwinds for AMCs: Active equity witnessed net inflows of INR 222bn during 1QFY22 (FY21: INR 676bn net outflows), aided by SIP flows that clocked in at a healthy INR 266bn. Net inflows, coupled with N50/N200, returned 7.0/8.5% during 1QFY22, driving industry equity AUM higher by 12% sequentially. Higher equity prices and lower fixed income yields are expected to boost treasury gains. Given the sharp run-up in the stock price (44% over the past two months), we downgrade the MOFS to REDUCE (from ADD) with an increased TP of INR 900. We reiterate UTIAM as our top BUY with an increased TP of INR 920 (23.2x FY23E NOPLAT + cash + investments).

Nippon Life India Asset Management: NAM has been able to stabilize its market share in the high-margin equity segment over the past two quarters at 7%. We expect it to focus on improving performance to continue recouping its lost market share. Additionally, we expect the company to benefit from increased credibility to raise HNI/institutional capital. Driven by cost optimization, we expect the company to deliver an FY21-23E revenue/NOPLAT CAGR of 12.7/17.5%. We maintain our ADD rating on the stock with a target price of INR360, valuing the stock at 36x Mar-23E NOPLAT + Mar-22E cash and investments. The stock is currently trading at FY22E/23E EV/NOPLAT of 39.9/32.8 and P/E of 34.4/28.9x. Symphony: Symphony clocked an all-round recovery with domestic, exports and subsidiaries revenues seeing beat in expectation. High trade inventory impacted domestic revenue during 9MFY21 (down by 50% YoY) while the strong 28% YoY growth in 4QFY21 (despite a firm base) reflects positive sentiment of trade partners. RoW revenue grew by 46% YoY, owing to robust exports (delay in shipment in 3Q) and recovery of CT, Australia (up 85% YoY). Thereby, consolidated revenue saw robust 36% growth. Domestic EBIT margin contracted by >650bps YoY, owing to high commodity inflation and delay in price hike. RoW EBIT margin saw sharp improvement (18% vs. 2% YoY) due to margin recovery in CT, Australia (EBITDA margin of 17% vs. -2% YoY). We are encouraged by an all-round recovery (key rationale for our stock upgrade in Jan-21); however, localised lockdown has raised concerns on summer-2021 performance for cooling products. As...

We maintain our Buy rating with a target price of Rs 390 (28x FY23E EPS), an upside of 15%.

On sustained cost controls and improved outlook, we revise our rating to Buy from Hold with a target price of Rs 360 (28x FY23E EPS).

We maintain a Hold with a target price of Rs 284 (27x FY22E EPS)

Nippon Life India AMC (Nippon) posted modest PAT growth of 6% YoY to | 145 crore on a consolidated basis as cost rationalisation and healthy growth in other income compensated for a decline in revenues. Overall AUM...

We have fine-tuned our estimates for FY2021E and FY2022E and introduce FY2023E estimates in this note. We maintain our Buy rating on the stock with a PT of Rs. 345. Nippon Life India Asset Management's (NAM's) Q2FY2021 results were encouraging. Operational numbers came above expectations, helped by cost control because of marginal increase in Assets Under Management (AUMs). The AUM decline trend seen in Q1 was arrested and AUM at Rs. 2,76,774 crore saw a marginal increase on q-o-q basis, which is encouraging. Quarterly average AUM came in at Rs. 2,00,030 crore,...

We remain positive on the stock considering our expectations of 1) strong equity marketperformance,2)NAMgainingmarketshareunderthenewpromoters,3)costs controlwillnarrowdownthefinancialperformancegapwhencomparedwithpeers, and4)valuationsareattractiveat21.6xFY23Eearnings.OurestimatesforFY21have...

We expect NAM to post an FY21-23E revenue/PAT CAGR of 13.7/15.8% and retain a REDUCE rating with TP of Rs 280 i.e. at 36x (20% discount to HDFCAMC's multiple) FY22E NOPLAT + cash and investments. Any signs of improving performance and market share will be key re-rating drivers for the stock. While we remain concerned about the loss of market share in both debt and equity assetsdown 332/275bps since Mar-19 to 7.5/6.8%we believe that post ownership change, NAM stands to benefit from increased credibility to raise HNI/institutional capital. We expect the company to focus on improving investment return performance and gradually recoup part of its lost market share, although this journey would neither be easy nor inexpensive.