Nippon Life India Asset Management Ltd. share price target

NAM: Strong growth but upside capped cut to HOLD. APOLP: Disappointing result on all fronts. ITC: Cigarette and paperboard businesses disappoint. LT: Order inflow guidance raised; maintain BUY. NTPC: Normal quarter, aggressive expansion; maintain BUY. MRCO: Domestic business still lacklustre. UTIAM: Core earnings miss estimates. ASTRA: Mixed quarter, guidance broadly intact

Recommendation: We maintain our BUY recommendation on the stock.

QAAUM growth robust at 29% YoY in Q3 fuelled by 10%+ share of industry-wide net equity flows (ex-arbitrage and index)

Management expects India's MF industry to grow 15% in medium term assuming 10% rise in annual inflows

A combination of overall industry AUM growth, strong retail franchise and good fund performance has driven significant market share gains for Nippon Life AM (NAM) in equity (30bps in H1FY24), SIP flows (300bps in H1FY24) and SIP book (46bps in H1FY24).

We maintain our BUY recommendation on the stock.

Quarterly Update Q2FY24

We factor in 17.4% AAUM CAGR between FY23-25E and overall revenue yield to decline from 45.9bps in FY23 to 44.8bps in FY24E to 42.8bps in FY25E leading to a revenue CAGR of 13% during the same period. We expect total opex CAGR of 11.1%, resulting in ~14.2/13.7% core EBITDA/PAT CAGR over FY23-25E.

QAAUM growth strong at 12% YoY in Q1 fuelled by 20% share of industry-wide net equity flows (ex-arbitrage and index)

Recommendation: We maintain our BUY recommendation on the stock.