Shares of Nippon Life India AMC Ltd. surged as much as 7.4% on Tuesday, December 10, to ₹788.6, which is a 52-week high for the stock.

The move comes after brokerage firm Motilal Oswal projected that the stock will hit levels of ₹900, implyig a potential upside of 25% from Monday’s closing levels.

This is also the highest price target on the street for Nippon Life India AMC, along with InCred and Jefferies, who also have a price target of ₹900.

Nippon India AMC has seen strong market share gains in the equity segment to 7.6% in October 2024 from 7% in April 2022 led by better fund performance.

The company also plans to bring in large offshore funds with the help of its parent company, according to Motilal Oswal. While the passive segment is margin dilutive for the company, incremental Assets Under Management (AUM) brings incremental profits, which is a positive for the company.

Motilal Oswal expects yields on the equity segment to decline at a moderate pace compared to the last two years. The decline in overall yields will be protected by a higher share of equities and mix in debt AUM likely likely to move towards longer duration funds. It expects yields to drop by 2.5 basis points in the current financial year and 1 basis point each across financial year 2026 and 2027.

Nippon India Life AMC’s AUM, revenue and core net profit is likely to grow at a Compounded Annual Growth Rate of 28%, 23% and 28% respectively over financial year 2024 – 2027 estimated Assets Under Management. During the same period, it can also generate ₹5,230 crore in cumulative operating free cash flow.

Shares of Nippon Life India AMC are trading 6.6% higher on Tuesday at ₹783. The stock has risen 71% so far in 2024. The stock was up 79% in 2023 as well.