Motilal Oswal Recommends ‘Buy’ for ICICI Pru AMC with 23% Upside

Motilal Oswal has reiterated its ‘Buy’ rating on ICICI Prudential Asset Management Company (AMC), setting a 12-month price target of Rs 3,800. This target suggests a potential upside exceeding 23% from the current market price.

The brokerage firm identifies several long-term growth catalysts expected to bolster ICICI Pru AMC’s earnings. These drivers include the company’s dominance in active equity, robust growth in its alternatives business, and consistent SIP flows.

Active Equity Dominance

ICICI Pru AMC stands as India’s premier active asset manager, overseeing a mutual fund Quarterly Average AUM (QAAUM) of Rs 11.2 lakh crore. The company commands the highest industry market share in both active mutual funds and equity-oriented hybrids.

• Active mutual funds market share: 13.5%
• Equity-oriented hybrids market share: 26.6%
• Equity QAAUM growth (FY21-26 CAGR): 33% to Rs 6.1 lakh crore
• Industry’s overall equity QAAUM growth: nearly 29%

Alternatives Business Expansion

The alternatives segment, encompassing Portfolio Management Services (PMS), Alternative Investment Funds (AIF), and advisory services, represents a rapidly growing and highly profitable area for the AMC. This platform recorded significant QAAUM growth and contributed substantially to operating revenue.

• Alternatives platform QAAUM (June 2026): Rs 79,450 crore
• Alternatives business CAGR (FY23-26): 50%
• Contribution to operating revenue: 10%
• PMS and AIF net yields: 95 bps

Diversified Product Offerings

ICICI Pru AMC has strategically broadened its product suite beyond traditional mutual funds to meet evolving investor demands. This includes a focus on passive funds and specialized investment vehicles, expanding its market footprint.

• Passive QAAUM: Rs 1.9 lakh crore
• Passive QAAUM year-on-year growth: 36.5%
• Passive QAAUM as percentage of total: 16%
• Specialised Investment Funds (SIFs) industry share: 20% under the iSIF brand

Extensive Distribution Network and Financials

The company’s broad distribution network, comprising over 1.16 lakh distributors and 286 offices, is crucial for customer acquisition and fostering retail investor loyalty. This network serves a significant base of unique investors and captures a large share of incremental customer additions.

• Unique investors served: 17.3 million
• Industry’s incremental customer additions (Q1FY27) accounted for: 70%
• SIP franchise market share (Q1FY27): 15.4%

ICICI Pru AMC maintains strong revenue yields due to its dominant position in high-yield active equity and hybrid assets. The company demonstrated resilience by absorbing recent regulatory adjustments to Total Expense Ratio (TER) caps with minimal impact on profitability.

• Net profit (Q1FY27): Rs 965 crore, up 23% from Rs 784 crore last year
• Revenue from operations (Q1FY27): Rs 1,564 crore, a 17.5% surge
• Total income (Q1FY27): Rs 1,745 crore, an 18% rise

Given its predominantly fixed-cost operating base, the projected AUM growth is expected to drive healthy operating leverage and generate strong cash between FY26-28, supporting the positive outlook.