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ICICI Prudential Asset Management Company Ltd. (ICICI Prudential AMC) delivered a strong performance in the March quarter of financial year 2026, leading Centrum Broking to reiterate its ‘Buy’ recommendation on the stock while maintaining it as a Top Pick, citing sustained growth in assets, strong systematic investment plan inflows, and improved profitability with a target price of Rs 3,600
In its post‑results note, Centrum highlighted the sharp rise in quarterly average assets under management (QAAUM), which grew 25.6 per cent year‑on‑year to Rs 11 trillion, driven largely by equity‑oriented schemes. Equity assets stood at around Rs 6.2 trillion, rising to nearly Rs 6.5 trillion when arbitrage assets were included, the brokerage noted.
Systematic investment plan momentum remained strong during the quarter, with monthly SIP and systematic transfer plan inflows at around Rs 51 billion in March 2026. This, combined with disciplined cost control, helped the asset manager deliver a profit beat.
Profit after tax rose 10.4 per cent year‑on‑year to Rs 7.6 billion, exceeding Centrum’s estimates by nearly 6 per cent. Core profit after tax jumped 27 per cent year‑on‑year to Rs 8.3 billion, beating expectations by 8 per cent.
Operating revenue climbed 19.5 per cent year‑on‑year to Rs 15.2 billion, with mutual fund operations contributing approximately 91 per cent of net revenue during the quarter.
“Employee expenses declined 13 per cent year‑on‑year, while other expenses fell 19 per cent year‑on‑year, resulting in total operating costs being about 7 per cent below our estimate,” the brokerage noted.
However, blended yield moderated to 46 basis points during the quarter, reflecting a gradual shift in product mix toward exchange‑traded funds and other passive products.
“The moderation in yield is attributable to an increasing contribution from ETFs and passive offerings,” Centrum said, while adding that the impact was offset by scale benefits and operating leverage.
On the back of the strong quarterly performance, Centrum revised its estimates upward. The brokerage raised its QAAUM forecasts by 3–4 per cent for financial years 2027 and 2028, projecting overall QAAUM to grow at a compound annual growth rate of 19 per cent over FY26–FY28, reaching Rs 14.7 trillion.
Profit estimates were also upgraded by 2–4 per cent, with profit after tax and core profit after tax expected to grow at 18 per cent and 17 per cent compound annual growth rates, respectively, over the same period.
Reflecting the improved outlook, Centrum raised its target price to Rs 3,600, from Rs 3,467 earlier, while maintaining its target valuation multiple of 39 times FY28 expected earnings. The stock currently trades at around 36 times FY28 expected earnings per share.
