Nippon Life India AMC: Yield up, target raised to ₹1,050

What changed this quarter

Nippon Life India Asset Management (NAM) delivered another strong quarter, supported by better-than-expected core income and improving yields despite volatility in equities. Core income came in at INR 740 crore, which was a 5.6% beat versus estimates, aided by 3.2% higher revenue. The quarter stood out because the company improved its blended yield even after a steep equity correction in March 2026.

The key driver highlighted in the note was the rising share of higher-yielding gold and silver ETFs within the overall mix. That shift helped protect yields at a time when equity markets were under pressure and is now being treated as an important monitorable.

Core income beat and what drove it

The report attributes the core-income outperformance to revenue coming in above expectations. In a separate update included in the text, core income was also described as 4.5% ahead of estimates, driven by a 1.9% revenue beat and a 2.7% opex beat. While these are presented as different snapshots from research updates, both point to the same theme: a steady quarter with a positive surprise on profitability.

Equity quarterly average AUM (QAAuM) growth was cited at 5.2% QoQ in one of the updates, indicating that the base was still expanding even as equity markets showed a downward bias later.

Yield improvement led by gold and silver ETFs

Blended yield moved up 0.5 bp QoQ to 40.7 bps (versus an estimate of 39.5 bps) as the gold and silver ETF mix improved. Another update in the text puts blended yield at 40.2 bps, again linking the outcome to the higher share of gold and silver ETFs.

The note also specifies yield levels for these products: gold ETF yield of 60 bps and silver ETF yield of 35 bps. The higher ETF mix helped lift blended yields at a time when equity markets corrected.

Gold and silver ETF AUM is now a key monitorable

The research highlights a sharp jump in gold and silver ETF AUM. As of end-January 2026, gold plus silver ETF AUM increased to INR 1,00,000 crore from INR 68,800 crore, a 45% month-on-month rise. At that point, it was said to contribute 14% to 15% of overall AUM.

In the quarter commentary included earlier in the text, the share of gold and silver ETFs increased to 12.2% from 7.9% QoQ. Both sets of figures reinforce the same conclusion: the ETF mix is changing fast and the yield implications are material.

Market share trends in SIPs and net equity flows

Even with equity AUM market share at 7.2% in FY26, NAM’s share in key flow indicators was higher. The report cites SIP market share of 11% to 12% and net equity flows market share of 10% in FY26, both ahead of its equity AUM share.

In another metric mentioned, net equity flow market share stood at 10.4% for 9MFY26, supported by consistent performance in the 3-year and 5-year buckets. The data points to stronger momentum in flows than in the existing AUM base.

ESOP-led opex tweak and earnings impact

The note flags a new ESOP scheme and raises opex assumptions for FY27E and FY28E by an average of 2%. At the same time, this is expected to be offset by an upgrade in revenue assumptions due to higher ETF yields.

As a result, the report states that core profit after tax (PAT) is higher by an average of 2.3% in that set of revisions. Separately, another update in the text refers to a core PAT upgrade of 4% and 10% for FY27E and FY28E, citing higher net yields in equity (due to lower commission) and a better ETF mix.

Valuation: multiple tweak and target price raised

The report reflects a more optimistic valuation stance, lifting the valuation multiple to 35x on March 2028 core EPS from 33x and raising the target price to INR 1,050 from INR 985, while retaining a ‘BUY’ rating.

Elsewhere in the included recommendation snippets, Nomura is shown adjusting the price target to INR 1,050 from INR 1,000, also keeping a Buy. Another update mentions a target price move to INR 1,000 from INR 930 with a multiple tweak to 35x on September 2027 core EPS (from 34x), again retaining Buy.

Key numbers at a glance

Why the story matters for investors

For listed AMCs, earnings sensitivity is closely tied to market levels, equity AUM, and net yield. The key takeaway from the report is that NAM’s product mix is shifting toward higher-yielding gold and silver ETFs, which can support blended yields even when equities correct.

At the same time, the note underlines that flow market share in SIPs and net equity flows is running above equity AUM market share. If sustained, this gap can translate into market share gains in AUM over time, but the report also frames gold and silver ETF share and yields as key variables to track.

Conclusion

The quarter’s beat in core income and the improvement in blended yields were attributed to higher gold and silver ETF contribution and solid QAAuM growth. With an ESOP-led opex increase built into estimates and a revenue uplift from ETF yields, the brokerage raised its valuation multiple and lifted the target price to INR 1,050, maintaining a Buy. Going forward, the report flags gold and silver ETF AUM share as an important monitorable as it becomes a larger part of overall AUM and blended yields.