Nomura has initiated coverage on several Asset Management Companies (AMCs), providing mixed ratings based on the company’s prospects and industry dynamics. Here are the key recommendations from Nomura’s brokerage radar:
- HDFC AMC: Nomura has initiated a ‘Buy’ rating on HDFC Asset Management Company with a target price of ₹5,000, highlighting its potential for strong growth.
- Nippon Life AMC: The brokerage has also initiated a ‘Buy’ on Nippon Life Asset Management, setting a target price of ₹785, citing its strong fundamentals and growth potential.
- UTI AMC: Nomura has assigned a ‘Neutral’ rating for UTI Asset Management Company with a target price of ₹1,300, reflecting a balanced outlook on the company’s performance.
Nomura’s analysis suggests a long runway for growth in the AMC sector, driven by the increasing financialization of savings in India. The AMC industry’s Assets Under Management (AUM) are expected to record a strong compound annual growth rate (CAGR) of 18% over FY24-30, supported by expanding retail and institutional participation.
The growth of Exchange Traded Funds (ETFs) is expected to be driven by continued institutional inflows. However, Nomura notes that core operating profitability is likely to moderate gradually over the coming years.
The brokerage believes that the AMCs remain a strong play on the ongoing trend of financialization, with opportunities for further expansion and value creation, though profitability improvements may be moderate.
Disclaimer: This information is for informational purposes only and should not be considered as investment advice.
