NAM India ignites growth through Active Momentum Fund

NAM India started FY 26 with solid top-line growth and earnings, with record quarterly operating profit and net profit. These results have been driven by robust growth in mutual fund QAAUM, market expansion, and an increased unique customer base. In addition, NAM strengthened its foothold in factor-based investing with the launch of Nippon India Active Momentum Fund, broadening its product portfolio.

Nippon Life India Asset Management Limited (NAM India), incorporated in 1995, is one of the largest asset management companies in India, serving as the asset manager for Nippon India Mutual Fund (NIMF) and managing assets across mutual funds, ETFs, portfolio management services, alternative investment funds, pension funds, and offshore funds. NAM India has 266 branches in India and is one of the largest ETF players. Its business also includes advisory mandates and fund management via GIFT City, reflecting a comprehensive platform for both domestic and international asset management.

The company’s primary segment is asset management services. NAM India caters to three investor groups: Corporate (40.7% of FY 25 MAAUM), High Networth Individual (HNI) (29.9%), and Retail (29.4%). Geographically, it is segmented into two regions: Top 30 cities (81.8% FY 25 AUM) and Beyond 30 cities (18.2%).

HNI AUM driving Q1 26 surge

NAM India released its earnings results for Q1 26 on July 28, 2025. The company reported a record top-line, up 18.4% y/y at INR7.5bn, driven by double- digit SIP market share and equity net sales, and 32% y/y growth in HNI AUM reaching INR1.9tn. During Q1 26, the AAUM reached INR6.1tn, up by 27% y/y. Operating profit experienced 23% y/y growth, reaching INR3.8bn and net profit rose 19% y/y, to INR4bn.

In addition, retail assets contributed 29% to the company’s AUM, with digital purchases rising to INR3.6m, posting a 26.6% y/y growth. This quarter also experienced a significant rise in unique customers, with a customer base of 21.2 million facilitated by the company’s digital channel.

Fueling growth with momentum fund

NAM India announced the launch of the Nippon India Active Momentum Fund on February 6, 2025. This open-ended equity scheme seeks to deliver long-term capital appreciation by utilizing a quantitative multi-factor approach that dynamically blends price momentum, earnings revisions, beta, and volatility signals to optimize portfolio exposure throughout both “risk-on” and “risk-off” market phases. The fund is accessible to both retail and institutional investors, with a minimum investment threshold of INR500.

The offering introduces a differentiated investment solution to the market, further diversifying NAM India’s product line and reinforcing its reputation as an industry innovator. By integrating both technical factors (price momentum) and fundamental signals (earnings revisions), along with risk management elements such as minimum volatility and beta, the fund seeks to capture upside while mitigating downside risk across market cycles.

Momentum investing has emerged as a significant trend in both domestic and global markets. The Nippon India Active Momentum Fund enhances the company’s appeal to investors seeking active, factor-based equity strategies, broadens its equity product suite, and improves income visibility. By expanding its presence in the thematic active segment, NAM India aims to support long-term growth, strengthen its competitive positioning, and increase its market share in India’s highly contested mutual fund industry.

Robust growth in CFO

NAM India reported a strong top-line performance over FY 22-25, posting a revenue CAGR of 18%, reaching INR25.2bn in FY 25, driven by sustained AUM growth led by equity and ETF, bolstered by retail participation and SIP growth. EBIT rose at a CAGR of 19.7% to INR17bn, with margin expanding by 284bp to 67.5%. Net income increased at a CAGR of 20% to INR12.9bn.

Consistent net income resulted in FCF increasing from INR6.3bn to INR6.7bn over FY 22-25, supported by robust growth in cash inflow from operations, increasing from INR5.8bn to INR12bn. Consequently, ROE improved by 877bp to 31.4%.

In comparison, HDFC Asset Management Co. Ltd., a local peer, reported slightly higher revenue CAGR of 18.6% over FY 22-25, reaching INR40.6bn in FY 25. EBIT rose at a CAGR of 20.9% to INR33bn, with margins witnessing expansion from 76.6% in FY 22 to 81.2% in FY 25. Net income grew at a CAGR of 20.9% to INR24.6bn.

Optimistic outlook amongst analysts

Over the past 12 months, the company’s stock has delivered returns of approximately 14.6%. In comparison, HDFC AMC’s stock delivered higher returns of 24.8% over the same period. In addition, the company paid an annual dividend of INR18 in FY 24, resulting in a dividend yield of 3.1%. Moreover, analysts expect an average dividend yield of 3% over the next three years.

NAM India is currently trading at a P/E of 33.6x, based on the FY 26 estimated EPS of INR23.7, which is higher than its 3-year historical average of 24.7x but lower than HDFC AMC’s P/E of 40.7x. The company is currently trading at a PBR multiple of 11.3x, which is higher than its 3-year historical average of 6.6x but lower than HDFC AMC (13.5x).

NAM India is monitored by 21 analysts, 16 of whom have ‘Buy’ ratings and five have ‘Hold’ ratings for an average target price of INR 871.2, implying a 9.1% upside potential from the current price.

Analysts’ views are supported by an estimated revenue CAGR of 14.5%, reaching INR37.9bn over FY 25-28. EBIT is estimated to rise at a CAGR of 8.9% to INR22bn, with a margin of 58% in FY 28. In addition, analysts estimate a net profit CAGR of 15.5% to INR19.8bn with a margin of 52.3%, while EPS is expected to increase to INR31.2 in FY 28 from INR20 in FY 25. Likewise, analysts estimate an EBIT CAGR of 16.2% and a net profit CAGR of 15.5% for HDFC AMC over FY 25-28.

Overall, NAM India has demonstrated robust historical performance, marked by strong revenue and earnings growth, driven by expanding AUM and product innovation. Supported by a solid balance sheet and consistent earnings momentum, NAM India is well positioned for sustained growth, underpinned by rising digital adoption, a diversified customer base, and enhancing market share.

However, NAM India faces several potential risks including market volatility, declining fee yields, and operational threats such as cyber disruptions and cost pressures. While overall annual growth has remained robust, sustained stress from IT incidents, regulatory shifts, or escalating distribution costs could dampen future profitability, hinder innovation, and erode stakeholder confidence.