Emkay keeps Buy rating on ICICI Pru AMC, target at Rs 3,800

what happened

According to a research report by Emkay Global Financial published on moneycontrol.com, ICICI Pru AMC delivered steady results in 2QFY27. Mutual-fund QAAUM rose about 4% sequentially to Rs11.6trn, while revenue yields increased to 57.5bps. The combination drove roughly 7% quarter-on-quarter revenue growth.

EBITDA margin expanded by 20bps sequentially to 72.6%, exceeding Emkay’s estimate on stronger-than-expected revenue growth. PAT was Rs8.89bn, down about 8% from the previous quarter because of lower other income amid negative MTM movements, but around 4% above the research firm’s estimate.

Management said market volatility caused some redemption pressure, although gross flows remained broadly steady. Mutual-fund revenue yields improved for several reasons, while alternate yields rose quarter on quarter as the composition of alternate AUM changed. The company sees opportunities in the small-cap segment and plans to gradually open the mid-cap segment when appropriate.

After incorporating the second-quarter developments, Emkay made marginal changes to its estimates, leaving PAT projections for FY27–29E largely unchanged. The firm maintained its Buy rating and September 2027 target price of Rs3,800, implying a FY28E PER of about 43x.

why it matters

The report highlights the metrics most relevant to ICICI Pru AMC: asset growth, fee yields, profitability, fund flows and the effect of market volatility on redemptions.

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