ICICI Prudential AMC shares can rise another 26%, Morgan Stanley says with a 'buy' rating

Brokerage firm Morgan Stanley has initiated coverage on ICICI Prudential Asset Management Company, one of India's largest asset managers, with an 'Overweight' rating.

The foreign brokerage has a price target of ₹3,500 on the stock, which implies a potential upside of 26% from current levels.

Morgan Stanley said ICICI Prudential AMC is well positioned to deliver strong, industry-leading profit growth over the medium term. This outlook is driven by the company's leadership position in active equity mutual funds and alternative assets, its industry-leading operating profitability, and its strong brand franchise supported by a robust distribution network.

The brokerage estimates a 26% CAGR in total average assets under management between FY26 and FY28, while mutual fund average assets under management are expected to grow at a 25% CAGR over the same period.

Morgan Stanley also expects the share of equity, excluding ETFs, to rise to 63% of mutual fund AAUM by FY28 from 61% in FY25, while market share is seen remaining stable.

On the revenue front, Morgan Stanley forecasts a 22% CAGR in net operating revenue over FY26 to FY28.

Mutual fund revenues are expected to grow at a 21% CAGR, while net revenues from portfolio management services and alternative investment funds are projected to post a faster 36% CAGR over the same period.

Several brokerages have initiated coverage on the stock in the recent past with positive recommendations.

Centrum Broking has assigned a 'Buy' rating with a price target of ₹3,181, while Equirus Securities initiated coverage with a 'Long' rating and a target of ₹2,900.

PL Capital, part of the Prabhudas Lilladher Group, also began coverage with a 'Buy' call and a price target of ₹3,000.

ICICI Prudential AMC had a strong debut on the stock market, listing at a premium of over 20% as investors bet on sustained domestic inflows into mutual funds.

The stock made its debut at ₹2,600 on the National Stock Exchange, representing a 20.09% premium over the upper end of the IPO price band of ₹2,165. The ₹10,603 crore public issue was priced in the range of ₹2,061 to ₹2,165 per share.

Since listing, ICICI Prudential AMC has emerged as India's most valuable listed asset management company, with a market capitalisation of around ₹1.12 lakh crore.

This places it ahead of peers such as HDFC Asset Management Company and Nippon Life India Asset Management, which are valued at around ₹56,000 crore.

On Friday, shares of ICICI Prudential Asset Management Company Ltd. ended 0.54% lower at ₹2,768.