Nippon Life India Asset Management: PAT growth of 41% & Revenue growth of 43% in Q1-25 at a PE of 37

NAM-INDIA delivered market share gains in the last 5 consecutive quarters. Fastest growing among the Top 10 AMC for FY24.

Sep 04, 2024

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1. What is NAM-INDIA interesting?

Despite only 3.1% of India's population investing in mutual funds, the industry's Assets Under Management (AUM) have seen a robust 20% compound annual growth rate over the last decade, highlighting significant growth potential. In this high growth market, NAM-INDIA is riding the industry tailwinds to consistently increase its market share for the last five consecutive quarters.

2. One of the largest Asset Managers in India

No.1 Non-Bank Sponsored MF in India
Maintained industry ranking of 4th Largest AMC based on Quarterly Average Assets Under Management (QAAUM)
Have the largest base in the Mutual Fund industry, with 17.5 mn unique investors.
Over 1 in 3 mutual fund investors invest with us.
We continue to be one of the largest ETF players

3. FY20-24: PAT CAGR of 28% & Revenue CAGR of 8%

4. Strong FY24: PAT up 53% & Revenue up 22% YoY

5. Strong Q1-25: PAT up 41% & Revenue up 43% YoY

PAT down 3% & Revenue up 8% QoQ

6. Business metrics: Strong & improving return ratios

7. PAT growth of 41% & Revenue growth of 43% in Q1-25 at a PE of 36

8. Do I stay?

If I hold the stock then one may continue holding on to NAM-INDIA

Based on FY24 and Q1-25 performance, NAM-INDIA is delivering extremely strong business momentum and one needs to ride out the momentum till it lasts

In Q1 FY25, NAM India has achieved a Profit After Tax of INR 3.32 bn as well as its highest ever quarterly Operating Profit at INR 3.08 bn.
We have had the highest increase in QAAUM market share on a YoY basis among all AMCs and second highest increase QoQ
On a QoQ basis, we have been the fastest growing AMC among the Top-10 players.
This is the fifth successive quarter of market share increase that we have witnessed
The fastest growing large AMCs in B30 locations.

9. Do I enter?

If I am looking to enter NAM-INDIA then

NAM-INDIA has delivered PAT growth of 41% and revenue growth of 43% in Q1-25 at a PE of 36 which makes the valuations fairly valued in the short term.
If NAM-INDIA continues the business momentum of FY24 into FY25 delivering highest QAAUM market share increase among all AMCs, there would be value in the stock over the medium to longer term.