The active equity net inflows plunged 25.1% MoM in August, but the monthly SIP inflows remained stable. The SIP net inflows came in at Rs 1.37 trillion, so far in FY26. Leading brokerage house, Nuvama Institutional Equities, pointed out that this could help Asset Management Companies (AMCs) and Registrar and Transfer Agents (RTAs) report a recovery in earnings growth (QoQ) on the back of steady inflows led by SIPs and stable equity markets.
Nuvama on August Mutual Fund inflows
Though there is a drag on a month-on-month basis, Nuvama says the inflows into active equity are stable. They pointed out that the relatively muted market sentiment led to the drop in equity AUM on a monthly basis. However, large and midcap categories attracted 27.1% while the flexi-cap funds attracted 18.1% of inflows in August.
Overall, small-cap funds garnered 11.8% of the active equity net inflows in August, while thematic funds accounted for 9.2% of the net inflows.
In contrast, Nuvama highlighted that the inflows into Passive Funds improved. Overall, Passives reported net inflows of Rs 11,440 crore in August and Passive inflows via NFOs improved 6.2% MoM. 17 new NFOs were launched in August compared to 13 in July.
According to the brokerage house, all of these factors will help in the earnings growth of the listed companies in the AMC space. Nuvama’s top picks in this segment include HDFC AMC, Nippon India Life, and KFin Tech. Here is a detailed analysis of the stocks and the growth potential going forward.
Nuvama on HDFC AMC
Nuvama has a ‘Buy’ rating on HDFC AMC and has raised the target price to Rs 6,530 per share. This implies an upside of 12.6% for the HDFC AMC share price. Stable equity market flows and AUM market share of 12.8% are the key factors supporting the Buy recommendation.
According to the brokerage house, the growing SIP market share, up 61 bps QoQ, sustained flows, along with a stable market outlook, are going to help the company’s financial performance. They have raised the FY27 price-to-earnings estimate to 41.6x.
Nuvama on Nippon Life India AMC
Nippon Life India AMC is the other key pick in this space by Nuvama. They have maintained the Buy rating but increased the target price to Rs 1,010 from Rs 960 a share earlier. This new target price implies 23% upside for the Nippon Life India AMC share price. Given the 26.6% growth in total AUM in Q1FY26, Nippon Life India posted revenue growth of 20.1% YoY, well over estimates.
The strong financials, along with robust SIP-led inflows in Q1, support the positive recommendation by Nuvama. The strong MTM action leading to 8.6% QoQ improvement in equity adds to the positive sentiment. Moreover, in terms of valuation, the share price of Nippon Life India is at a 15% discount to HDFC AMC.
Nuvama on KFin Tech
This is one name you cannot miss if you are keen about applying for IPOs. Nuvama has a Buy rating on the company with a target of Rs 1,540 per share. This implies 39% upside for the KFin Tech share price from current levels. It delivered a strong 15.4% YoY revenue growth in Q1FY26, supported by steady performance in the MF segment. Nuvama pointed out that “stable QoQ growth in market share at 33%” also added to the catalysts that support the positive recommendation on the stock.
The consolidated profit for KFin Tech grew 13.9% YoY in Q1FY26. The brokerage house has valued the share price of KFin Tech at 1,540 on the back of the acquisition of Ascent, a strong deal pipeline and scope for EBITDA margin expansion.