Whalesbook
Motilal Oswal has analyzed ICICI Prudential Asset Management Company (IPRU)'s performance and future prospects, reaffirming its 'Buy' recommendation and ₹3,850 price target. The firm's analysis points to strong financial gains and projected growth that supports the target.
Financial Performance Analysis
The asset manager posted robust financial results for the fiscal year ending March 2026 (FY26). Operating revenue saw a healthy increase of 23% year-on-year, reaching INR57.6 billion. This growth was accompanied by a substantial 24% YoY rise in profit after tax (PAT), culminating at approximately INR33 billion. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also showed impressive growth, up 29% YoY to INR42.9 billion, with operating margins reaching 76.5% in the fourth quarter.
Future Outlook and Valuation
Motilal Oswal expects ICICI Prudential AMC to continue expanding through FY28. Forecasts show compound annual growth rates (CAGRs) of 17% for assets under management (AUM), 15% for revenue, and 16% for PAT between FY26 and FY28E. The ₹3,850 price target is based on these projections, valuing the company at 45 times its estimated FY28E core earnings per share.
Regulatory Environment
The report also notes potential impacts from upcoming Total Expense Ratio (TER) regulations expected in April 2026. Management indicated these changes could reduce gross yields by about 3-4 basis points, though final details are still being discussed. This potential impact has been considered in the valuation.