HDFC AMC, UTI AMC: Uptick in SIP flows turn analysts bullish on AMC stocks

AMC stocks India: AMC stocks to buy: Mutual fund inflows, strong SIPs, and market recovery boost earnings outlook for AMCs. UTI AMC, HDFC AMC, Nippon AMC among top picks from brokerages

AMC stocks to buy: Investors latched on to shares of asset management companies (AMCs) on Thursday as analysts saw further upside in the sector, driven by steady mutual fund (MF) flows and a recovery in the secondary market. This, they said, should aid earnings recovery for related players in the coming quarters.

 

On the bourses, UTI Asset Management Company (UTI AMC) shares hit a record high of ₹1,428 per share on the BSE, rising 6.3 per cent in the intraday trade. Shares of HDFC AMC, Shriram AMC, Nippon Life India Asset Management, Escorp Asset Management, and Aditya Birla Sun Life AMC, meanwhile, gained in the range of 1 per cent to 3.6 per cent in the intraday trade. By comparison, the BSE Sensex index was down around 0.3 per cent at noon. 

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Record SIP flows lift earnings outlook

Active equity net MF inflows surged 29.6 per cent month-on-month (M-o-M) to ₹31,410 crore in June 2025, assisted by robust systematic investment plan (SIP) inflows of record ₹27,269 crore (up 2.2 per cent M-o-M) and lump sum inflows of around ₹4,140 crore.

 

This follows sustained momentum in SIP flows, which stood at ₹26,600 crore in April, and ₹26,700 crore in May, contributing significantly towards active equity net inflows of ₹26,920 crore and ₹24,230 crore in the respective months.

 

"This, along with strong market momentum in the April-June quarter of financial year 2025-26 (Q1FY26), will lead to a surge in active equity asset under management (AUM) for asset managers. Listed asset managers are likely to clock sustained aggregate revenue growth of 17 per cent year-on-year (Y-o-Y) and 3.9 per cent Q-o-Q," said analysts at Nuvama Institutional Equities. 

 

 

Operating leverage is likely to drive aggregate core Ebit (earnings before interest and tax) growth at 21.3 per cent Y-o-Y and 4.1 per cent Q-o-Q and adjusted net profit rising 9.8 per cent Y-o-Y in Q1FY26 due to strong MTM equity performance.

 

Over the longer-term, analysts at Kotak Institutional Equities have revised their earnings estimates upwards by 4-9 per cent, over FY25-28, primarily led by higher mark-to-market (MTM) assumptions.

 

The brokerage, now, assumes 15 per cent compounded annual growth rate (CAGR) for AUM over FY2027-28E, baking in 10 per cent growth from MTM gains as against the previous assumption of 5 per cent growth.

 

Valuations, as per analysts, too, remain supportive of the structural uptrend. Those at ICICI Securities, for instance, believe there is a case for an increase in AMCs' valuation multiples due to increased trend of commission rationalisations, possible benefits from higher consumer discretionary income post tax cuts/repo rate cuts, possible higher growth from a new asset class of MFs (Specialized Investment Fund), and lower regulatory risk. 

 

"HDFC AMC, NAM, Aditya Birla Sun Life, and UTI have given average returns of 34 per cent since the start of FY26. Valuations remain relatively well placed and we believe AMC players are better placed on both structure and valuations," they said.

 

Further, while analysts believe current valuation multiples are stiffer, compared to February, with 1-year forward price-to-earnings (PE) around 10-25 per cent above mean valuations, relatively stable net MF flows, even during the market correction, provide AUM growth visibility and hence support valuations.

 

Long-term plays

From a long-term lens, analysts at Antique Broking eye re-rating for AMC stocks as it sees the Indian mutual fund industry growing at 15 per cent CAGR in total AUM and 20 per cent CAGR in active equities AUM led by low double-digit nominal GDP/corporate earnings growth; resilient SIP flows; rapid acceleration by digital-first/fintech distributors; and sustained growth momentum in passive AUM.

 

The brokerage has initiated coverage on HDFC AMC, Nippon Life India AMC, Aditya Birla Sun Life AMC, and UTI AMC with 'Buy' ratings.

 

Analysts at Nuvama prefer HDFC AMC (target: ₹5,840) and NAM (target: ₹960), while KIE bet on UTI AMC (Buy), NAM, HDFC AMC, and Aditya Birla Sun (Add for all).