Motilal Oswal has maintained a positive outlook on ICICI Prudential AMC following its strong Q2 financial results, raising earnings estimates for FY27 and FY28. The brokerage highlighted improved yields and consistent asset growth as key drivers. Investors should also note that the company has declared an interim dividend of Rs 30 per share, with the record date set for October 21, 2026.
Motilal Oswal has maintained its positive outlook on ICICI Prudential Asset Management Company (AMC) following the release of its September quarter results. The brokerage firm has set a price target of Rs 3,700, supported by an upgrade in earnings estimates for the upcoming financial years. Motilal Oswal increased its profit projections for FY27 by 4% and for FY28 by 2%, citing better-than-expected yields and stable growth in asset management.
Financial Performance and Dividend
For the second quarter of the 2027 fiscal year, ICICI Prudential AMC reported operating revenue of approximately Rs 1,670 crore. This marks a year-on-year growth of about 18%. Net profit for the period stood at Rs 889 crore, which is a 6% increase compared to the same quarter last year. The brokerage firm noted that the improvement in yields—the income generated relative to assets managed—reaching 57.9 basis points, was a significant factor in the revised outlook.
In addition to the financial report, the company announced an interim dividend of Rs 30 per share. Investors who wish to be eligible for this dividend should note that the record date is October 21, 2026. This date is important for shareholders as it determines who is on the company's books to receive the payout.
Risks and Market Context
While the brokerage remains optimistic about the company's ability to capture the structural shift toward financial savings in India, there are factors that investors should track. The company's profit saw a slight decline on a quarter-on-quarter basis. This was largely due to fluctuations in treasury income, which is sensitive to market movements—often called mark-to-market impacts. When market conditions shift, the value of the company's own treasury holdings can change, which directly impacts the bottom line.
Furthermore, operating expenses have been on an upward trend, specifically driven by higher employee-related costs. If these expenses continue to grow faster than revenue, they could pressure profit margins. Investors should also remain aware of the broader regulatory environment in the mutual fund sector. Regulatory changes, such as adjustments to the Total Expense Ratio (TER) norms, continue to be a potential factor that could affect the profitability of all asset management companies in India.
Moving forward, the primary focus for investors will be the company's ability to maintain healthy yield levels and manage rising operational costs. The company's success in continuing to attract steady fund inflows from both retail and institutional segments will be the most critical indicator of its long-term growth trajectory.