Nuvama upbeat on AMCs, RTAs; backs HDFC AMC, Nippon Life, KFin; here's why

Nuvama on HDFC AMC, Nippon Life, KFin: Active equity net inflows in July 2025 surged 80 per cent month-on-month (M-o-M) to an all-time high of ₹56,540 crore, aided by strong systematic investment plan (SIP) and lump-sum contributions, according to Nuvama Institutional Equities. 

 

The brokerage expects asset management companies (AMCs) and registrar and transfer agents (RTAs) to post a recovery in quarterly earnings, supported by steady inflows and stable equity markets. Its top sector picks are HDFC Asset Management Company (target price ₹6,530), Nippon Life India Asset Management (₹1,010) and KFin Technologies (₹1,540).

 

“We reckon AMCs and RTAs shall report a recovery in Q-o-Q earnings growth driven by steady inflows led by SIPs and stable equity markets. Our top picks in the sector are HDFC AMC (Target: ₹6,530), NAM (Target: ₹1,010) and KFin Technologies (Target: ₹1,540),” analysts at Nuvama said, in a note.  Track Stock Market LIVE Updates 

 

The SIP inflows climbed 4.4 per cent M-o-M to ₹28,460 crore, while lump-sum inflows surged 5.8 times to ₹28,070 crore. Existing schemes attracted ₹45,650 crore (+49.8 per cent M-o-M), and 12 active equity new fund offers (NFOs) garnered ₹10,880 crore (+10.7x M-o-M). For FY26 to date, the industry has reported active equity inflows of ₹1.39 trillion, down 10.1 per cent year-on-year, with SIP and lump-sum inflows at ₹1.09 trillion and ₹30,050 crore, respectively.

 

By category, large- and mid-cap funds captured 21.8 per cent of July’s active equity inflows, flexi-cap funds 13.5 per cent, small-cap funds 11.5 per cent, and thematic funds 16.7 per cent. However, weak market performance – with the Nifty 50 down 2.9 per cent M-o-M, and the Nifty Midcap 150 and Nifty Smallcap 250 indices down 2.9 per cent and 3.7 per cent, respectively – pulled total active equity assets under management (AUM) down 0.4 per cent M-o-M to ₹41.3 trillion.

 

Passive funds (ETFs and index funds, excluding overseas fund-of-funds and gold) recorded net inflows of ₹8,260 crore in July. Passive inflows via NFOs declined 19.2 per cent M-o-M to ₹580 crore despite the launch of 13 NFOs, compared with 15 in June. Gold and overseas fund-of-funds attracted ₹1,450 crore. Arbitrage funds saw net inflows of ₹7,300 crore, down 53.2 per cent M-o-M.

 

Debt and liquid schemes also registered strong M-o-Mentum. Debt funds recorded inflows of ₹13,910 crore, while liquid schemes logged ₹92,790 crore in July.

 

That said, analysts at Nuvama believe the robust flow trend, particularly through SIPs, coupled with resilient market participation, will support earnings growth for key players in the AMC and RTA space, even amid short-term market volatility.