JP Morgan has started coverage on India’s capital-markets space with a clear preference for Angel One, CAMS and ICICI AMC. According to the international brokerage house, steady SIP inflows, supportive tax changes and rising domestic participation continue to back the sector.

In its June 23 note, JP Morgan said monthly SIP inflows rose 48% to Rs 31,000 crore in May 2026. That came even as the Nifty 50 delivered a two-year CAGR of just 0.8% in rupee terms and -3.2% in US dollar terms. Over FY25 and FY26, FPIs sold $36 billion, or about Rs 3.3 lakh crore, of Indian equities, but cumulative equity and balanced-fund net inflows still stood at Rs 9.43 lakh crore.

Against that backdrop, the brokerage initiated coverage with an ‘Overweight’ recommendation on Angel One, Computer Age Management Services, ICICI AMC, Nippon Life India Asset Management and HDFC AMC. 

“Our stock selection reflects business-model quality, regulatory exposure and valuation. We prefer Angel One over CAMS, ICICI AMC, Nippon Life India Asset Managementand HDFC AMC. We are ‘Neutral’ on BSE and KFin Technologies as we await a better entry point in parts of the space, while we remain ‘Underweight’ on CDSL and MCX,” JP Morgan explained.

SIP flows a key catalyst driving capital market ecosystem

JP Morgan’s core argument is that SIPs have become the anchor for the Indian capital-markets ecosystem. The brokerage said SIPs contributed 77% of total equity and balanced-fund net inflows in FY26, with monthly flows at Rs 31,000 crore in May 2026.

The firm said that resilience stands out because it has come during a period of weak benchmark returns and continued foreign selling. It argued that this points to a deeper retail participation trend rather than a short burst of enthusiasm. JP Morgan said the Nifty had stayed broadly flat over the past two years, yet SIP flows kept rising, showing that set-and-forget retail participation has held up through volatility.

The brokerage also pointed to tax and policy support. It said equity is taxed at 12.5% long-term capital gains, while the removal of indexation, taxation of insurance policy proceeds and slab-rate taxation for debt mutual funds have improved the relative appeal of equity products.

Angel One is JP Morgan’s top pick

Angel One is JP Morgan’s top stock call in the sector. The brokerage initiated the stock with an ‘Overweight’ rating and a March 2027 target price of Rs 420, implying an upside of about 18%.

JP Morgan’s table showed Angel One trading at 23.9 times FY27E earnings, with FY26-28E EPS CAGR of 35.6% and a FY27E PEG of 0.7, the lowest in its coverage universe.

The brokerage said low-cost retail brokers benefit from scale amid competition, and Angel One fits that framework best among the broking names under coverage. It also said the sector’s next winners are likely to be companies that keep gaining market share and convert that into better operating leverage.

JP Morgan added that it sees limited risk to derivatives volumes from potential restrictions on retail participation, though it also said entry restrictions or expiry-day reductions could hurt volumes by more than 20% in some scenarios.

CAMS is the preferred MF RTA play

CAMS is JP Morgan’s second preferred pick. It initiated the stock with an ‘Overweight’ rating and a target price of Rs 950, implying an upside of about 17%.

The brokerage’s estimates show CAMS trading at 36.7 times FY27E earnings, with FY26-28E EPS CAGR of 20.4% and a FY27E PEG of 1.8.

JP Morgan described mutual-fund RTAs as B2B businesses with lower pricing power and lower operating leverage than exchanges, depositories, brokers and asset managers. Even so, CAMS made it into the brokerage’s top two stock picks, indicating that it sees a better mix of business quality, valuation and execution in CAMS than in other names in that segment.

ICICI AMC completes the top three

JP Morgan’s third preferred pick is ICICI AMC. It initiated the stock with an ‘Overweight’ rating and a target price of Rs 4,090, implying an upside of around 21%.

The stock trades at 44 times FY27E earnings on JP Morgan’s estimates, with FY26-28E EPS CAGR of 20% and a FY27E PEG of 2.2.

The brokerage said AMCs are less cyclical than exchanges or brokers because they are linked to assets under management rather than transaction volumes. It also noted that TER scale regulations cap operating leverage in the AMC business. Even so, the steady rise in SIP flows and equity-fund inflows keeps the setup supportive for asset managers, and JP Morgan sees ICICI AMC as one of the better ways to play that trend.

NAM and HDFC AMC also got ‘Overweight’ ratings

JP Morgan also initiated Nippon Life India Asset Management, or NAM, with an ‘Overweight’ rating and a target price of Rs 1,360, implying an upside of about 16%. HDFC AMC was initiated with an ‘Overweight’ rating and a target price of Rs 3,250, implying an upside of around 20%.

For NAM, JP Morgan’s table showed FY27E P/E of 42.8 times, FY26-28E EPS CAGR of 20.5% and FY27E PEG of 2.1. For HDFC AMC, it showed FY27E P/E of 38 times, FY26-28E EPS CAGR of 15.3% and FY27E PEG of 2.5.

JP Morgan also noted that NAM had already risen 56% over the last year against a 3% decline in the Nifty. Even after that run-up, the brokerage kept the stock in the ‘Overweight’ bucket.

BSE and KFin got ‘Neutral’ ratings

JP Morgan initiated BSE with a ‘Neutral’ rating and a target price of Rs 4,330, implying an upside of roughly 10%. It said BSE had risen 50% over the past year, versus a 3% decline in the Nifty.

Its table showed BSE trading at 51.6 times FY27E earnings, with FY26-28E EPS CAGR of 26.3% and FY27E PEG of 2.0. The brokerage’s stance suggests it sees the business as strong, but finds the current valuation less compelling.

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KFin Technologies was the other ‘Neutral’-rated stock in the report. JP Morgan assigned it a target price of Rs 960, implying an upside of about 5%. The stock trades at 40.2 times FY27E earnings, with FY26-28E EPS CAGR of 17.6% and FY27E PEG of 2.3.

JP Morgan said it was awaiting a better entry point in KFin Technologies. Like CAMS, KFin sits in the mutual-fund infrastructure layer, where the brokerage sees lower pricing power and lower operating leverage than in exchanges, depositories, brokers or AMCs.

CDSL and MCX were the two ‘Underweight’ calls

CDSL and MCX were the only two ‘Underweight’ calls in JP Morgan’s initiation.

For CDSL, the brokerage assigned a target price of Rs 1,200, implying a downside of about 11%. Its table showed FY27E P/E of 57.8 times, FY26-28E EPS CAGR of 12.9% and FY27E PEG of 4.5, the highest in the coverage universe. JP Morgan’s stance suggests it sees valuation running ahead of growth.

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MCX was also rated ‘Underweight’, with a target price of Rs 2,550, implying a downside of about 10%. JP Morgan’s estimates show FY27E P/E of 45.6 times, FY26-28E EPS CAGR of 20.2% and FY27E PEG of 2.3.

The brokerage said MCX’s FY26 futures average daily traded value rose to Rs 64,200 crore, up 138% year-on-year, helped by strength in bullion and energy prices. It also noted that the stock had rallied 78% over the last year. Even so, JP Morgan stayed cautious on valuation.

JP Morgan still prefers exchanges at the business-model level

At the business-model level, JP Morgan said it prefers Exchanges over Depositories, Brokers, Asset Managers and MF RTAs.

“Exchanges and depositories enjoy stronger pricing power and operating leverage; low-cost retail brokers benefit from scale amidst competition. AMCs are less cyclical as they are linked to AUM rather than transaction volumes, but TER scale regulations cap operating leverage. MF RTAs are B2B operators with lower pricing power and operating leverage,” JP Morgan said.

Conclusion

JP Morgan’s view on India capital markets is built around one central call: domestic financialisation is still holding up. SIP flows remain strong, domestic fund inflows have stayed firm despite foreign selling, and the brokerage sees enough support from participation trends and policy changes to stay constructive on the sector.

Within that setup, Angel One, CAMS and ICICI AMC are its top picks. while BSE and KFin Technologies were rated ‘Neutral’. CDSL and MCX were the two ‘Underweight’ calls.

Disclaimer: The institutional equity research ratings, target prices, and valuation metrics (such as P/E and PEG ratios) outlined in this brokerage coverage report are for informational and educational purposes only. They do not constitute investment advice, an offer, or a solicitation to buy, sell, or hold any financial instruments. Capital market infrastructure and financial service stocks are subject to distinct regulatory modifications, volume cyclicality, and retail participation dynamics. Readers should conduct independent analysis and consult a SEBI-registered investment advisor or certified financial consultant before making market entries or capital allocations based on these projections.

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