Centrum Broking: Nippon Life’s Revenue Miss Offset By Mark To Market Gains, Supporting PAT
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Centrum Broking Report
Nippon Life India Asset Management Ltd.’s earnings were a miss on revenue though mark to market gains led to overall profit after tax beat.
Core operating profit fell by 29.9% QoQ as revenue was lower at Rs 2.33 billion (led by a 21% QoQ fall in equity quarterly average assets under management QAAUM) and overall opex rose led by employee cost.
Though MTM gains saw a higher PAT at Rs 1.56 billion. To reduce other income volatility, focus is on reducing equity share at the asset management company level.
Leveraging on the Nippon brand, it has partly regained lost market share in debt and liquid funds and added an average 120 institutional customers every quarter since October 2019.
We like Nippon Life India given its pan-India distribution network and focus on sourcing granular retail asset under management from B-30 cities.
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