CAMS, Nuvama, ABSL AMC: Why is Motilal Oswal betting on these stocks?

Domestic brokerage Motilal Oswal analysts remain positive on the mutual fund (MF)-related space, on the back of structural growth opportunities across asset management companies (AMCs), distributors, intermediaries, and wealth managers. 

 

“Structurally, we remain positive on the mutual fund-related space – AMCs, distributors, intermediaries, and wealth managers. Our top picks in the space include ABSL AMC, CAMS, and Nuvama,” said Prayesh Jain, Nitin Aggarwal, Kartikeya Mohata and Muskan Chopra of Motilal Oswal, in a note dated September 29, 2025.

 

Retail flows moderate amid weak market performance

 

According to Motilal Oswal, retail mutual fund activity has shown some moderation, particularly in Systematic Investment Plan (SIP) flows, as one-year SIP returns have turned negative. Analysts noted that this trend is more pronounced in the direct channel, while distribution-led models have sustained stronger momentum in the recent past.

 

“While lump-sum flows traditionally pick up after market corrections, current activity is subdued,” the analysts said, highlighting that the prevailing macro backdrop – including tariff uncertainty and geopolitical tensions – is keeping investors on the sidelines.

 

They added that rising customer acquisition costs and mounting profitability pressures have forced digital platforms to scale back on subsidised marketing and referral programmes. “Consequently, incremental SIP additions have slowed, even as SIP closures remained at their lowest since November 2024,” the analysts said. 

 

Debt flows, B2B2C distribution trends

 

On the debt side, Motilal Oswal analysts observed that flows remain muted despite recent RBI rate cuts. “Much of the easing was already priced in, and investors entering debt funds post-cut have seen limited duration gains,” the brokerage said. Concerns around a potential re-steepening of the yield curve and pressure on INR (Rupee) and government securities have further dampened appetite for long-duration funds.

 

Institutional and family office allocations continue to favor shorter-duration products for lower volatility, while corporate clients increasingly prefer direct placements in commercial paper (CP) and certificates of deposit (CD), which offer transparent yields, superior liquidity, and eliminate fund expense ratios. Analysts noted, “The relative cost advantage of these products over debt mutual funds has restrained flows into the latter.”

 

Motilal Oswal highlighted the evolution of the business-to-business-to-consumer (B2B2C) distribution channel as a key structural driver for mutual fund growth. “The new wave of distributors is younger, tech-savvy, and expects seamless onboarding and high-quality digital support,” they said. B2B2C platforms that offer gamified dashboards, analytics, and round-the-clock servicing are better positioned to attract and retain this cohort. 

 

The brokerage further noted that the market is broadening beyond metros, with distributors outside the top 30 cities increasing their share from 47 per cent to 56 per cent over the last five years. “Branch-led servicing is becoming unfeasible, and digital onboarding, remote training, and centralised call centers are emerging as critical enablers for scaling distribution in Tier-2/3/4 towns,” Motilal Oswal analysts said.

 

For distributors, convenience, marketing support, and clarity of commissions remain key priorities. “Platforms that combine technology, marketing, and fair commissions are emerging as the preferred partners for AMCs,” the brokerage said. Structural drivers such as GST credits and income-tax benefits for distributors, along with potential inflows from option money and gaming-sector liquidity, could further deepen the B2B2C ecosystem in the medium term.