Earnings Outlook
High AUM growth to boost Nippon Life AMC PAT
This story was originally published at 17:32 IST on 25 July 2025
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By Shravani Chandiwade
MUMBAI - Nippon Life India Asset Management Co. is expected to report a higher consolidated net profit on year for the June quarter, driven by better performance of its equity funds and a substantial increase in its assets under management. The company's strong distribution network is also expected to support net profit growth for the reporting quarter.
The asset managment company is expected to report a consolidated net profit of INR 3.75 billion for the June quarter, up 13% on year and 26% on quarter, according to the average of estimates from five brokerages. The sequential rise in the company's bottom line is driven by its attempt to rationalise distributors' commissions by aligning it with investors' interest. This will improve profit margins, ICICI Securities Ltd. said. The highest estimate for net profit is INR 3.88 billion by JM Financial Institutional Securities Pvt. Ltd. and the lowest is INR 3.53 billion by Kotak Institutional Equities.
The company is expected to report net revenues of INR 6.09 billion for the latest quarter, up 21% on year and 8% on quarter. The highest estimate for net revenue is INR 6.28 billion by Centrum Broking Ltd. and the lowest revenue estimate of INR 5.82 billion is by Kotak.
According to data by the Association of Mutual Funds in India, the quarterly average assets under management for asset management companies grew 6-10% in the reporting quarter. For Nippon Life AMC, the quarterly average assets under management are expected to grow 10% on quarter to INR 6.12 trillion from INR 5.57 trillion, driven by its expansive product range, JM Financial said.
Due to the company's first mover advantage and dominant presence in exchange traded funds, its main focus for FY26 is on launches of new passive schemes. "After rate cut, rollover in FDs will happen at a lower rate," ICICI Securities said. "Hence, mutual fund schemes start becoming the first choice for investors and NAM (Nippon Asset Management) is seeing good flow into shorter/medium duration products in month of Mar and Apr' 25, respectively."
The company has 33% of its total assets under management in small-cap equity funds, which have demonstrated a strong performance as of June 2025. The company's small-cap equity funds outperformed the benchmark over the 5-year and 10-year horizons in June. However, in the 1-year horizon these funds have shown a decline in performance with its ranking falling from quartile 2 to quartile 3.
The company's mid-cap category schemes have outperformed the benchmark in the 1-year, 3-year, and 5-year horizons as of June-end. The large cap category schemes have a first quartile ranking across the 3-year, 5-year, and 10- year horizons. However, for the 1- year horizon these were placed in the second quartile for the June quarter.
The company's flexi cap schemes have underperformed over the 1-year and 3-year horizons as of June-end and its multi-cap schemes have outperformed the benchmark across the 1-year, 3-year, and 5-year time horizons.
The asset manager is likely to benefit from Specialised Investment Fund, a new asset class launched in April 2025, as it plans to launch a new fund offer under this category. This category offers investors greater flexibility across equity, debt, real estate investment trusts, and derivatives.
Of the 15 brokerage reports on the company available with Informist, 13 have a 'buy' recommendation at an average target price of INR 756. One brokerage has a 'sell' recommendation and one has a 'hold' recommendation.
Shares of Nippon Life India AMC ended at INR 809.70 on the National Stock Exchange Friday, down 4.3%. The stock has risen 30% since the announcement of its March quarter earnings on Apr. 28. The company is scheduled to report its earnings on Monday.
Following are the Apr-Jun earnings estimates for Nippon Life India Asset Management Co. based on reports from five brokerage firms in the descending order of the estimate of net profit:
Brokerage firm | Net sales (In INR million) | Net profit (In INR million) |
JM Financial Institutional Securities Pvt Ltd. | 6,119.00 | 3,880.00 |
Centrum Broking Ltd | 6,289.00 | 3,859.00 |
YES Securities (India) Ltd | 6,121.00 | 3,755.00 |
Sharekhan Ltd | 6,130.00 | 3,750.00 |
Kotak Institutional Equities | 5,822.00 | 3,535.00 |
Average | 6,096.20 | 3,755.80 |
End
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