Brokerage Prabhudas Lilladher has initiated coverage on ICICI AMC with a BUY rating and a target price of INR 3,000, versus the IPO allotment price of INR 2,165. The implied upside is roughly 39%, a punchy call for a large, scaled asset manager in a competitive market.
The framing of the report is unambiguous: ICICI AMC, in PL’s view, sits in a “position of dominance due to strong fundamentals”—a dominance they argue is visible in three measurable places:
(1) equity performance translating into industry-leading net equity flow market share,
(2) superior yield economics driven by a lower payout structure, and
(3) structural distribution advantage via ICICI Bank’s ecosystem, supplemented by a meaningfully diversified non-mutual-fund revenue stream.
Prabhudas Lilladher values ICICI AMC IPO at 38x Sep’27 core EPS to arrive at the INR 3,000 TP, while also noting that at the “upper band” level of INR 2,165 the stock reflects about ~27x Sep’27 core EPS, implying a discount of ~16–17% versus HDFC AMC and Nippon Life India AMC (NAM) at ~32x. The subtext: PL believes the market is currently pricing ICICI AMC as “one of the pack,” while the broker expects it to earn the right to be priced as “best in class.”
Why Prabhudas Lilladher’s Coverage Initiation on ICICI AMC Matters
Asset management companies are often sold as “market proxies,” but the market has become more selective in what it rewards. In an AMC model, market levels matter, but net flows matter more because flows build durable AUM, which builds fee revenues, which builds operating leverage. The best AMCs increasingly separate themselves through:
- Persistent investment performance (to win flows),
- Distribution advantage (to sustain flows at low cost),
- Pricing/yield power (to monetise AUM efficiently),
- Diversification (to reduce earnings volatility and dependence on a single fee stream).
PL’s argument is that ICICI AMC checks these boxes more convincingly than the market is currently acknowledging.
Core of Prabhudas Lilladher’s Bullishness on ICICI AMC
Prabhudas Lilladher’s BUY on ICICI Prudential AMC rests on four reinforcing levers: performance-led flows, scale-with-yield discipline, structural distribution, and diversification.
1) Performance Translating Into Market-Share Gains:
PL argues ICICI AMC’s edge is not just size, but repeatable performance quality: strongest 1-year showing and consistently top-3 in the 3-year bucket since Feb’22, with ~90% of equity AUM in Q1 (top quintile) as of Nov’25. In India’s retail-driven MF market, that kind of persistence tends to convert into distributor confidence, SIP stickiness and incremental inflows. The proof-point, per PL, is commercial: net equity flow market share of 15.2% (FY25) and 17.5% (8MFY26)—above its equity AUM “stock” share—implying ICICI AMC is taking share, not merely defending it, and potentially setting up a compounding loop where flow share pulls stock share upward over time.
2) Yield Leadership Despite Scale (Better Monetisation of AUM):
Where large AMCs often see fee compression, PL says ICICI AMC is holding a yield advantage: ~67 bps equity yield (FY25) versus HDFC AMC (~62.5), SBI (~57.5) and NAM (~61.1), plus industry-leading ~32.6 bps debt yield—supporting ~47.4 bps blended MF yield. PL ties this to structural economics: lower payout ratio (~46%), a more favourable banca + direct mix (typically lower commission intensity), and broader active equity product set (43 schemes) that reduces concentration risk and supports fee realisation. In an AUM-heavy model, a few bps of yield is materially earnings-accretive—this is central to the “premium earnings” case.
3) Distribution Moat via ICICI Bank’s Eecosystem:
PL treats ICICI Bank’s platform as a structural sourcing channel, not a cyclical tailwind: 7,246 branches, digital integration, and a relatively closed architecture where ICICI AMC captures ~73.7% of the bank’s MF sales and ~70% of MF-related AAuM. Beyond volumes, this matters because bank-led flows can be more stable in volatile markets and often come with better commission economics than open-market distribution—supporting both growth and yields.
4) Diversification Through Alternates:
Finally, PL highlights that ICICI AMC is less “single-stream” than peers: non-MF revenue ~9.2% (FY25), backed by alternates QAAuM ~INR 72,900 cr (Sep’25) across PMS (~INR 25,400 cr), AIF (~INR 147 cr) and advisory (~INR 329 cr). The strategic value is resilience—diversified fee pools can cushion regulatory pressure on MF economics (TER/commissions) and help the franchise command a platform multiple, not just a mutual-fund multiple.
Numbers PL is Underwriting:
ICICI AMC target price is based on a clean growth trajectory:
AAuM Growth
- AAuM (INR Cr): 8,35,600 (FY25) → 10,57,000 (FY26E) → 12,74,400 (FY27E) → 14,92,600 (FY28E)
- AAuM growth (%): 38.7% (FY25), 26.5% (FY26E), 20.6% (FY27E), 17.1% (FY28E)
Revenue & Profitability
- Revenue (INR Cr): 4,682,8 (FY25) → 7,693.7 (FY28E)
- Core Income (INR Cr): 3,236.2 (FY25) → 5,382.8 (FY28E)
- Core PAT (INR Cr): 2,427.9 (FY25) → 4,037.1 (FY28E)
- Core EPS (INR): 49.1 (FY25) → 61.0 (FY26E) → 71.5 (FY27E) → 81.7 (FY28E)
PL explicitly states an expectation that equity AAuM CAGR over FY25–28E will run about 2.5% higher than the industry, supporting a core PAT CAGR of ~18.5%, which the report positions as best among listed peers.
There is also a practical nuance in the report: as equity AUM expands meaningfully, yields may trend down (a common industry phenomenon). Yet PL argues operating leverage and mix should still deliver strong earnings progression, with core PAT to AUM expected around 26–27 bps over FY26–28E.
Peer Context: ICICI AMC vs HDFC AMC vs NAM
PL provides a peer comparison that frames ICICI AMC as a near-equal platform to HDFC AMC in profitability, with differentiated strengths in distribution and revenue diversification.
Some comparison anchors from the report’s framework:
- ICICI AMC shows strong scale: MAAuM ~INR 10.75 lakh crore (Nov’25) and market share ~13.2% overall; equity market share ~13.8% as of Nov’25.
- Valuation comparison: ICICI AMC at the referenced price implies ~27x Sep’27 core EPS, versus ~32x for HDFC AMC and NAM (as cited by PL).
- PL’s claim is forward-looking: ICICI AMC “may eventually command a premium to HDFC AMC” if distribution and diversification advantages persist while profitability remains comparable.
This is the crux: is ICICI AMC a discounted leader, or a leader with structurally lower multiple? PL is explicitly betting on the former.
Risks PL Flags
PL lists the key risks, and investors should translate them into watchpoints:
- Market volatility → risk to equity inflows and AUM; watch SIP persistence, redemption rates, and distributor sentiment.
- Intense competition → smaller AMCs can win flows quickly if performance surges; watch flow share versus stock share every quarter.
- Performance risk → underperformance in flagship schemes can dent retention; watch top scheme rankings and quartile movement.
- Regulatory risk (TER caps, commission structures) → direct hit to yields; watch SEBI stance and industry lobbying outcomes.
Additionally, the report hints at a structural tension: passive growth can pressure blended yields. ICICI AMC’s mix includes ETF/index exposure (with lower yields), so investors will be sensitive to whether active equity growth offsets passive dilution.
Bottom Line
ICICI AMC target price is not a “market will go up, so AMC will go up” call. It is a more specific wager: ICICI AMC can keep winning equity flows, monetise those flows at superior yields, and do it with a distribution advantage that peers cannot easily replicate—while adding stability through non-MF revenues.
If that thesis holds, the stock’s current valuation discount to premium peers becomes harder to justify. If it does not—if performance leadership fades, yields compress faster than expected, or regulation tightens—then the stock may behave like a scaled AMC with limited multiple expansion.
Disclaimer: This article is for informational purposes only and should not be considered as investment advice. It’s general information based on public broker commentary. Consult a registered advisor before investing.