How are energy investors positioned?
Investing.com - CLSA downgraded Nippon Life India Asset Management Ltd (NSE:NAM) from Outperform to Hold on Tuesday, while raising its price target to INR780.00 from INR700.00, citing expensive valuation despite strong performance.
The downgrade follows Nippon’s first-quarter fiscal 2026 net profit of Rs3.9 billion, which exceeded CLSA’s estimate by 14%, primarily due to higher-than-expected mark-to-market gains. The company’s mutual fund assets under management (AUM) grew 26% year-over-year and 15% quarter-over-quarter, marking the fastest growth among the top 10 asset management companies in India.
CLSA noted that while yields for the quarter remained largely flat compared to the previous quarter, the company experienced some yield expansion in the ETF segment due to a shift in scheme mix. Management continues to guide for a 2-3 basis point decline in yield annually.
Based on the stronger-than-expected momentum, CLSA has raised its AUM growth forecast for fiscal year 2026 to 22%, resulting in a 1%-8% increase in projected net profit for fiscal years 2026-2027. The firm increased its target price to reflect a June 2027 price-to-earnings ratio of 30x.
The current valuation is approximately 8% above the one standard deviation mark, a level last seen during the first and second quarters of 2022, when the company’s AUM experienced sequential growth for five consecutive quarters.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.