Stocks To Buy: Bernstein bets on this capital markets play but cites a key risk

Global brokerage firm Bernstein has initiated coverage on ICICI Prudential Asset Management Company (AMC) with an 'Outperform' rating and a price target of ₹3,500 per share.

The target implies an upside of about 23% from current levels.

According to Bernstein, the company has consistently delivered a strong combination of fund performance, rising inflows, and disciplined commission control. This, the brokerage said, reflects its investment style and brand strength.

Bernstein values the company at a premium to its peers, while it remains in-line on a core-profit multiple basis, factoring in its strong operating metrics and relatively larger alternatives business.

The brokerage, however, mentioned that key person risk is more pronounced for ICICI Prudential AMC compared to peers, as the Chief Investment Officer (CIO) plays a central role in driving fund performance.

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While near term stability remains intact, Bernstein flagged succession planning as a potential concern over the longer term.

That said, it added that the company's culture of promoting internally groomed talent could help maintain continuity in investment style and performance.

Since its listing, ICICI Prudential Asset Management Company has become the most valuable listed asset manager in India, with a market capitalisation of around ₹1.43 lakh crore, ahead of peers such as HDFC Asset Management Company and Nippon Life India Asset Management.

Shares of ICICI Prudential Asset Management Company ended 1.77% higher at ₹2,851 on Wednesday. The stock has declined 8% over the past one month.