12 NAM-INDIA share price target reports by brokerages below. See what is analyst's view on NAM-INDIA share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
The current economic slowdown will impact future inflows and revenue generation for NAM. Revenue yields are expected to be impacted amid declining AUMs, which in turn, would impact profitability. Loss of investor confidence, flight to safety due to recent industry developments could weigh on the stock. However, cost levers are in control. Post ownership change NAM stands to benefit from increased credibility to raise capital. We cut our earnings estimate by 7/11% for FY21/22E and retain Hold with TP of Rs 266 (30x Mar22E EPS).
For FY21, we expect core revenue/earnings from the AMC business to decline on account of weak outlook for capital markets and the consequent impact on AUM growth. However, given that the base (FY20) has been impacted by a large MTM loss of ~Rs1.5bn, we expect PAT growth to be higher. Even as the forthcoming economic headwinds and the likely volatility in the equity markets impair our ability to forecast AUM growth, we remain sanguine about the prospects of the Indian AMC industry given the low penetration levels vis-àvis developed countries, low degree of financial literacy and concentration of savings in physical assets. However, on account of the forthcoming economic headwinds and the likely volatility in the equity markets, we downgrade the stock to ACCUMULATE. We have revised our estimates for FY21/FY22 and our target price to Rs259 (from Rs327 earlier), valuing the stock at 26.0xFY22E P/E
Strong core despite market share loss! NAM printed 4QFY20 operating profits of Rs 1.52bn (+9.4/11.9% YoY/QoQ, 18.1% beat). Beat was primarily driven by lower expenses (-44.1/-27.7% YoY/QoQ). Large MTM loss (due to sharp correction on investments in equity AUM) on investment book resulted in negative other income of Rs 1.25bn and caused APAT to decline to just Rs 37mn (-97.3/-97.5% YoY/QoQ). We retain BUY with a TP of Rs 288 (36x Mar-22E NOLPAT + cash) Revenue at Rs 2.75bn declined 20.0%/9.4% YoY/QoQ
Reliance Nippon Asset Management (RNAM) is the fifth largest AMC in India, with AUM market share of 8.3% as of FY19. Strategic focus on retail segment (40% of AUM) via presence in B30 cities through a widespread distribution network of IFAs to enable sustain healthy growth ahead. We expect AUM to grow at ~9% CAGR in FY19-22E to Rs 296355 crore. Improving share of retail equity flows & gradual revival in debt & liquid flows, along with tax cuts could improve profitability. Accordingly, we expect PAT to grow at ~16% CAGR in FY19-22E to Rs 743 crore, translating to an average RoE of 23.9%. Buyout of old promoter’s stake by Nippon Life has removed substantial overhang and aiding better flows. Thereby rolling over to FY22, we upgrade our target price of Rs 300 to Rs 405 per share with a BUY rating on the stock.
Reliance Nippon Asset Management (RNAM) is the fifth largest AMC in India, with AUM market share of 8.3% as of FY19. Strategic focus on retail segment (40% of AUM) via presence in B30 cities through a widespread distribution network of IFAs to enable sustain healthy growth ahead. We expect AUM to grow at ~9% CAGR in FY19-22E to | 296355 crore. Improving share of retail equity flows & gradual revival in debt & liquid flows, along with tax cuts could improve profitability. Accordingly, we expect PAT to grow at ~16% CAGR in FY19-22E to | 743 crore, translating to an average RoE of 23.9%. Buyout of old promoter’s stake by Nippon Life has removed substantial overhang and aiding better flows. Thereby rolling over to FY22, we upgrade our target price of Rs 300 to Rs 405 per share with a BUY rating on the stock.
Reliance Nippon Asset Management (RNAM) is the fifth largest AMC in India, with AUM market share of 8.3% as of FY19. Strategic focus on retail segment (40% of AUM) via presence in B30 cities through a widespread distribution network of IFAs to enable sustain healthy growth ahead. We expect AUM to grow at ~9% CAGR in FY19-22E to Rs 296355 crore. Improving share of retail equity flows & gradual revival in debt & liquid flows, along with tax cuts could improve profitability. Accordingly, we expect PAT to grow at ~16% CAGR in FY19-22E to Rs 743 crore, translating to an average RoE of 23.9%. Buyout of old promoter’s stake by Nippon Life has removed substantial overhang and aiding better flows. Thereby rolling over to FY22, we upgrade our target price of Rs 300 to Rs 405 per share with a BUY rating on the stock.
Reliance Nippon Asset Management (RNAM) is the fifth largest AMC in India, with AUM market share of 8.3% as of FY19. Strategic focus on retail segment (40% of AUM) via presence in B30 cities through a widespread distribution network of IFAs to enable sustain healthy growth ahead. We expect AUM to grow at ~9% CAGR in FY19-22E to Rs 296355 crore. Improving share of retail equity flows & gradual revival in debt & liquid flows, along with tax cuts could improve profitability. Accordingly, we expect PAT to grow at ~16% CAGR in FY19-22E to Rs 743 crore, translating to an average RoE of 23.9%. Buyout of old promoter’s stake by Nippon Life has removed substantial overhang and aiding better flows. Thereby rolling over to FY22, we upgrade our target price of Rs 300 to Rs 405 per share with a BUY rating on the stock.
We have revised our MF AUM estimates by -8.9%/-8.9%/-8.9%, Net Revenue estimates by -4.7%/-8.9%/-9.0%, EBITDA estimates by 6.2%/2.0%/0.8% and PAT estimates by 11.0%/5.0%/3.4% for FY20/FY21/FY22, respectively. We have retained Accumulate rating on NAM, valuing the stock at 32.0x H1FY22E P/E and revising our target price to Rs380 (from Rs370 earlier).
We keep our MF AUM growth estimates unchanged at +1%/+12%/+15% for FY20/21/22E. Our thesis is that post arresting and reversing some of the decline in the liquid and other debt funds in H2FY20, the AUM growth should normalize to 12-15% from FY21 onwards. Also, we are building in an increasing share of equity-oriented schemes, which is higher margin and hence more profitable. We retain our revenue estimates but marginally tweak our expense assumptions for FY22E. As a result, our FY22E PAT is revised upwards by ~1% to Rs7.69bn. From a stock investment perspective, we retain our ACCUMULATE rating, valuing the stock at Rs370, based on 32x Sept-21E EPS.
Reliance Nippon Life Asset Management Limited (RNAM) reported its 2QFY20 results with the key pointers being: (1) Institutional and HNI businesses continue to be of concern, retail continues strong (2) Share of equity increases 100 bps QoQ to 43%. (See comprehensive conference call takeaways on page 2 for significant incremental colour). Per se, on the key financials, RNAM posted MF AUM decline of 16% YoY at Rs1,886bn, Net revenue decline of 23% YoY at Rs3,002mn, EBITDA growth of 4% at Rs1,435mn and PAT growth of 21% YoY at Rs1,367mn. We have revised our estimates for FY20/FY21/FY22 and retained Accumulate rating on RNAM, revising our target price to Rs323 (from Rs281 earlier), valuing the stock at 28.0x H1FY22E P/E.
Cost control shown in Q4FY19 is encouraging and if continued will help sustaining margins. Additionally, the exit of ADAG as promoter on stake sale to Nippon Life is a positive, which we believe will aid fund raising from HNIs and institutions. With the normalization of revenues and opex recognition as per the new SEBI norms, we expect margins to be maintained and yields to be stable. However, overhang from redemption risk lingers. We are factoring in ~11% AUM growth for FY20/21E. We recommend Hold with a revised target price of Rs238, at 25x FY21E EPS.
Led by a 47.1/25.6% YoY/QoQ drop in other expenses RNAM reported an EBITDA of Rs 1.14bn (+4.5/19.7% YoY/QoQ) and 17.7% above our estimates. We expect exit of ADAG to positively impact both performance. We value RNAM at 26x on its FY21E NOPLAT + value of investments to arrive at TP of Rs 254 (+29.7%) i.e. 5.5% of FY21E AUM.
Under the new compensation structure for distributors, management expects to share 50-70% of the TER with distributors. We revise earnings estimates lower for RNAM for FY19 / FY20E, as we build in the impact of TER cut and AUM growth estimates. Maintain BUY valuing RNAM at 22x FY20E EPS to arrive at our Target Price of Rs 192.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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