Buy Aditya Birla Sun Life AMC; target of Rs 1200: Prabhudas Lilladher

Moneycontrol • 10 days ago

Original source

Key Investment Pillars

  • Aditya Birla Sun Life AMC (ABSLAMC IN) saw a good quarter with core income 3.4% higher due to better revenue yield at 43.1bps, driven by a favorable asset mix change with equity share increasing by 78bps QoQ to 41%.
  • The company's equity fund performance in the 1-year bucket is consistently improving, which has started reflecting in the 3-year bucket, resulting in a net equity flow market share improvement to 1.2% for H1FY27 from 0.3% for FY26.
  • Growth momentum in the alternate business continues, with the share of non-MF revenue inching up slightly QoQ, and the company is expanding its presence across platforms.
  • Expenses are expected to remain broadly stable at Q2FY27 levels, with staff costs normalizing around current run-rates despite higher Q2 growth.

Thesis Validation Checklist

  • Investors should watch for the company's ability to sustain its improving equity performance and increase its net equity flow market share.
  • The company's strategy to balance aggressive sales growth with profitability and its investment in customer acquisition will be key monitorables.
  • The expansion of the company's alternate business, including its passive franchise and real estate credit opportunities fund, will also be important to track.
  • Additionally, investors should monitor the company's operating yield, core income, and PAT, as well as its ability to manage expenses and maintain its market share in flagship schemes.