Antique Stock Broking has initiated coverage on ICICI Prudential AMC with a 'Buy' rating, citing its market leadership, consistent fund performance, and strong inflow momentum as key drivers for sustained earnings growth. The brokerage has set a target price of Rs 3,600, implying a potential upside of about 19% from current levels.
ICICI Pru AMC, India's largest active mutual fund manager with a 13.5% share of actively managed assets, has built a strong track record of fund performance and consistent inflows. Antique noted that over 80% of the company's equity schemes have ranked in the top two quartiles across multiple timeframes, reinforcing investor confidence and supporting steady market share gains.
This performance consistency has translated into robust net inflows, even as the broader mutual fund industry experienced periods of volatility. The company's large and loyal retail investor base, comprising over 16 million investors, has also helped sustain strong inflow visibility, particularly through systematic investment plans (SIPs).
Strong Growth in High-Margin Segments
Antique highlighted ICICI Pru AMC's expansion beyond traditional mutual funds into higher-margin segments such as portfolio management services (PMS) and alternative investment funds (AIFs). Assets under management (AUM) in these segments have grown rapidly, supported by increasing demand from affluent and institutional investors.
The company's passive AUM has also expanded significantly, driven by growing adoption of exchange-traded funds (ETFs) and index strategies. Meanwhile, equity-oriented AUM continues to form a substantial portion of its overall portfolio, supporting higher yield profiles compared to debt-focused peers.
Stable Margins and Earnings Visibility
The brokerage noted that ICICI Pru AMC has maintained stable net yields and strong profitability despite industry-wide pressure from regulatory changes and fee compression. Its diversified product mix, disciplined pricing strategy, and expanding presence in higher-yield segments have supported margin resilience.
Antique expects the company's total AUM to grow at a compound annual rate of about 20% between FY25 and FY28, driven by sustained SIP inflows, rising financialisation of savings, and continued expansion in non-mutual fund segments.
Premium Valuation Justified
ICICI Pru AMC currently trades at premium valuation multiples relative to peers, which Antique believes are justified given its leadership position, superior earnings visibility, and scalable business model. The company's asset-light structure, high return ratios, and strong cash generation further support its investment appeal.
Antique added that structural tailwinds, including increasing retail participation, rising disposable incomes, and growing adoption of financial products, are likely to benefit large and established asset managers such as ICICI Pru AMC.
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