The shares of the asset management company gained up to 10 percent after the company’s net profit and revenue increased by 48 percent and 44 percent in Q2FY25, respectively.
With a market capitalization of Rs 44,876.87 crore, the shares of Nippon Life India Asset Management Ltd (NS:NIPF) were trading at Rs 708.70 per share, increasing around 5.34 percent as compared to the previous closing price of Rs 672.80 apiece.
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Reason for rise:-
The company shares have seen bullish movement after Nippon Life India Asset Management Ltd revenue zoomed by 45 percent on year on year basis from Rs 397 crore in Q2FY24 to Rs 571 crore in Q2FY25, however in Quarter a Quarter basis revenue increased by 13 percent from Rs 505 crore in Q1FY25 to Rs 571 crore Q2Y25.
Moreover, net profit is magnified by 48 percent on a yearly basis from Rs 244 crore in Q2FY24 to Rs 360 crore profit in Q2FY25, meanwhile on a quarter-on-quarter basis net profit zoomed times by 8 percent from Rs 332 crore in Q1FY25 to Rs 360 crore in Q2FY25.
Market Share:-
Market share rose to 8.20%, marking the fifth consecutive quarter of growth across all asset categories. Equity market share reached 6.88%, the highest since Dec 2020, while Equity AUM’s share in total AUM grew to 49.8% in Q1 FY25.
Business performance:-
The company ended the quarter with Rs 6.04 trillion in AUM. Mutual Fund QAAUM grew 12% QoQ and 54% YoY to Rs 4.84 trillion. Individual AUM rose 16% QoQ to Rs 2.98 trillion, while corporate AUM increased 15% QoQ to Rs 2.11 trillion.
Future outlook:-
The company is focused on profitable growth and preserving market share, while continuously evaluating strategies to de-risk its business. Employee engagement is central to its strategy. The board is committed to profit-sharing with shareholders, maintaining a long-term view on investments and growth.
Ratio analysis:-
The company’s critical ratios show that the return on equity increased from 20.57 percent in FY21-22 to 27.87 percent in FY22-23, while the return on capital employed increased from 25.37 percent to 32.75 percent. The net profit margin (NPM) for fiscal year 22-23 is 67.32 percent.
Shareholding pattern:-
In the company’s recent shareholding pattern, the Promoters of the company own 72.49 percent while Retail shareholders own a 6.31 percent stake in the company, and Foreign Institutional Investors own a 7.73 percent stake.
Company profile:-
Nippon Life India Asset Management Limited’s primary function is to serve as an investment manager for Nippon India Mutual Fund. The company manages mutual funds, such as exchange-traded funds (ETFs), managed accounts, and portfolio management services.
Written by:- Abhishek Singh
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