Prabhudas Lilladher keeps BUY on ICICIAM, cuts target to INR 3,420

what happened

According to Prabhudas Lilladher’s research report, ICICI Prudential Asset Management (ICICIAM) delivered a decent quarter. Core income beat estimates by 3.7%, supported by higher mutual-fund yield of 48 basis points versus the projected 46 basis points. The improvement was attributed to net equity flows moving toward smaller equity schemes rather than flagship products.

The company’s share of net equity flows fell to about 11% in 5MFY27 from approximately 19% in FY26. Prabhudas Lilladher linked the decline to ICICIAM’s weaker presence in the SMID and flexicap categories, which are seeing strong industry-wide inflows. Its equity-market share decreased by 29 basis points quarter on quarter to 13.8%. The PMS and AIF businesses continued to provide support, with their growth trajectory remaining healthy.

Weak equity returns are allowing mid-sized and smaller players to gain share of net equity flows, increasing fragmentation across the industry. Prabhudas Lilladher cut its multiple assumption to 38x from 40x, rolled its valuation forward to September 2028 core EPS and reduced the target to INR 3,420 from INR 3,550. The brokerage retained its BUY recommendation.

why it matters

The report highlights rising competition in asset management, with market-share pressure and a lower valuation multiple offset partly by continued growth in the PMS and AIF businesses.

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