ICICI Prudential AMC reported an 18% jump in revenue to ₹1,670 crore for the September quarter, but net profit growth slowed to 6% due to rising operational expenses and margin compression. Investors are focusing on the firm's declining equity market share and its strategic move to acquire ICICI Securities' portfolio management business to reclaim ground in small and mid-cap segments.
ICICI Prudential Asset Management Company posted a mixed performance in the second quarter of the 2027 fiscal year. While the top line grew significantly, rising operational costs squeezed profitability, creating a challenging backdrop for shareholders. The company reported an operating revenue of ₹1,670 crore, an 18% increase compared to the same period last year. This growth was driven by better mutual fund yields, which improved to 57.9 basis points from 56 basis points in the year-ago quarter.
However, profit growth did not match this pace. Net profit increased by only 6% to ₹890 crore. This slowdown was primarily driven by a 23% rise in total operating expenses, which climbed to ₹460 crore. As a result, the company’s net profit margin fell to 53.1%, down from 61.7% in the previous quarter. While the company maintained a healthy EBITDA margin of 72.6%, the rise in costs indicates that the firm is spending more to maintain its presence in a highly competitive market.
Market share has emerged as a key area of concern for the company. The firm’s equity market share declined to 13.8% during the quarter, down from 19% in the previous fiscal year. Industry trends show that while the broader market attracted significant equity inflows—totaling ₹1.06 trillion—the company has struggled to capture a proportional share of this growth. Analysts often link this difficulty to a limited presence in the volatile but high-growth small- and mid-cap (SMID) stock segments, which have attracted substantial investor interest lately.
To counter this, the board has approved the acquisition of the portfolio management services (PMS) business of ICICI Securities. This move is designed to expand the company's client base and tap into the specialized investment fund category, where assets under management have already doubled to ₹4,950 crore. By integrating these services, the management aims to strengthen its competitive position in the SMID segment.
Looking ahead, the company is also focusing on product diversification, having recently launched new offerings like a balanced hybrid fund and a BSE insurance ETF. These moves are part of a broader effort to adapt to changing investor preferences. Investors may track whether these strategic adjustments effectively reverse the trend of declining market share and if operational expenses can be managed more efficiently in the coming quarters to protect profit margins.