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Yes Securities Report
Revenue yield erosion continues to offset some of the benefit from improved flows:
The net flows into equity and hybrid category for the mutual funds industry was strong in Q4 FY24. Nippon Life India Asset Management Ltd. held double digit market share in net flows for Equity and Hybrid category in Q4 FY24. Its Equity assets under management (excluding-exchange traded fund) market share has also improved by 9 basis points QoQ and stood at 6.76%.
The share of Equity QAAUM in total QAAUM for the quarter has improved by 60 bps QoQ. However, due to telescopic pricing formula as prescribed by Securities and Exchange Board of India, the blended yield for Q4 FY24 was down by around 1 bp QoQ.
NAM has made a new employee stock ownership plan grant and half of its impact would be felt in FY25:
The employee expense is down by -1.4% QoQ, driven lower by change in provisions on PLI. The employee stock ownership plan cost in FY24 was around Rs 70 million. NAM has approved a grant of ESOPs which will cost around Rs 850-900 million over four years. Around, 49-50% cost for these new ESOPs granted would fall in FY25. Also, the management has guided that total operating expense in FY25 would increase by around 8-10% YoY, excluding the ESOP cost.
We maintain 'Add' rating on Nippon Life with a revised price target of Rs 650:
We value Nippon Life at 35 times FY26 earning price, at which the stock would trade at a price book of 9.3 times.
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