28 July 2020 Results Review 1QFY21

Nippon Life India Asset Management

Market share remains elusive REDUCE
While we remain concerned about the loss of market share in both debt and
CMP (as on 27 July 2020) Rs 270
equity assets—down 332/275bps since Mar-19 to 7.5/6.8%—we believe that
post ownership change, NAM stands to benefit from increased credibility to Target Price Rs 280
raise HNI/institutional capital. We expect the company to focus on improving NIFTY 11,132
investment return performance and gradually recoup part of its lost market
share, although this journey would neither be easy nor inexpensive. We KEY
OLD NEW
expect NAM to post an FY21-23E revenue/PAT CAGR of 13.7/15.8% and retain CHANGES
a REDUCE rating with TP of Rs 280 i.e. at 36x (20% discount to HDFCAMC’s Rating REDUCE REDUCE
multiple) FY22E NOPLAT + cash and investments. Any signs of improving Price Target Rs 271 Rs 280
performance and market share will be key re-rating drivers for the stock.
FY21E FY22E
 1QFY21 highlights: Revenue at Rs 2.33bn (-28.3%/-15.1% YoY/QoQ) was
EPS %
+6.2% +2.6%
5.1% below our estimate as outflows from the credit risk fund and a
reduction of equity in the mix resulted in a lower yield. Debt/equity
KEY STOCK DATA
QAAUM market share deteriorated 246/235bps YoY to 7.5/6.8%. Debt funds
QAAUM declined 9.0% QoQ due to outflows and write-downs. The core Bloomberg code NAM IN

operating profit was at Rs 966mn, -33.5/36.6% YoY/QoQ, mainly due to No. of Shares (mn) 612
lower revenue. Recovery in equity markets and decline in bond yields MCap (Rs bn) / ($ mn) 165/2,213
resulted in treasury income of Rs 1.03bn (+192% YoY), raising APAT by
6m avg traded value (Rs mn) 664
24.3% YoY to Rs 1.56bn.
52 Week high / low Rs 453/201
 Management stated that it raised capital from HNIs/family offices (75+),
corporate (26/100 BSE 100 began reinvesting), and institutions (adds: 120+
STOCK PERFORMANCE (%)
since Oct-19). NAM is revisiting its investment policy with the intent of
reducing the volatility of treasury income. 3M 6M 12M

Absolute (%) 12.2 (26.3) 18.9

 Outlook: We expect a gradual recovery in assets and earnings. For FY21E,
Relative (%) (7.3) (18.4) 18.7
we expect revenue/EBIT to decline 15.0/21.2% YoY respectively.
Financial Summary
SHAREHOLDING PATTERN (%)
1Q 1Q YoY 4Q
(Rs bn) QoQ (%) FY19 FY20 FY21E FY22E FY23E
FY21 FY20 (%) FY20 Mar-20 Jun-20
Revenue 2.33 3.25 -28.3 2.75 -15.1 14.8 12.0 10.2 11.7 13.2
Promoters 75.9 75.9
Operating profits 0.97 1.45 -33.5 1.52 -36.6 5.3 5.7 4.5 5.5 6.6
FIs & Local MFs 6.7 6.2
OP Margin (%) 42.0 45.2 -322bps 55.6 -1366bps 35.8 47.3 43.8 47.4 49.8
APAT 1.56 1.25 24.6 0.04 4,101.6 4.9 4.2 4.9 5.7 6.6 FPIs 5.3 5.8
EV/NOPLAT (x) 39.9 34.4 42.8 33.9 27.9 Public & Others 12.1 12.1
P/E (x) 34.0 40.7 34.4 29.8 25.6
Pledged Shares 0.00 0.00
ROE (%) 19.5 16.1 18.5 19.9 21.1
Source : BSE
Source: Company, HSIE Research

Change in estimates
FY21E FY21E Change FY22E FY22E Change
(Rs bn)
Revised Old % / bps Revised Old % / bps
Revenues 10.2 10.1 1.3 11.7 11.4 2.3
EBIT 4.5 4.4 3.9 5.6 5.4 3.7
EBIT margin (%) 44.3 43.1 114bps 47.8 47.2 64bps
NOPLAT 3.4 3.3 3.7 4.2 4.0 3.4
Madhukar Ladha, CFA
NOPLAT margin (%) 33.0 32.2 77bps 35.8 35.4 36bps
madhukar.ladha@hdfcsec.com
APAT 4.9 4.6 6.2 5.7 5.5 2.6 +91-22-6171-7323
RoE (%) 18.5 17.6 97bps 19.9 19.6 30bps
Source: Company, HSIE Research

HSIE Research is also available on Bloomberg ERH HDF <GO> & Thomson Reuters
Nippon Life India Asset Management: Results Review 1QFY21

NAM Results Summary: 1QFY21

(Rs mn) 1QFY21 1QFY20 YoY (%) 4QFY20 QoQ(%)
Revenue 2,331 3,251 (28.3) 2,745 (15.1)
Staff cost 715 825 (13.3) 529 35.3
Core operating profits at Rs Admin & other opex 439 629 (30.2) 402 9.1
9.67bn (-33.5/-36.6% Fee and commission 94 252 (62.8) 198 (52.7)
Total expenses 1,248 1,705 (26.8) 1,129 10.5
YoY/QoQ) were 18.2%
EBITDA 1,084 1,546 (29.9) 1,617 (33.0)
below estimates.
Depreciation and amortization 105 76 37.8 89 18.0
EBIT 979 1,470 (33.4) 1,528 (35.9)
Finance cost 13 17 (26.7) 5 173.9
Core operating profits 966 1,452 (33.5) 1,523 (36.6)
Other income grew 192%
Other Income 1,031 353 192.0 -1,249 NM
YoY on account of large PBT 1,997 1,805 10.6 274 630.1
MTM gains. Tax 436 549 (20.7) 232 87.6
PAT (pre minority interest) 1,561 1,256 24.3 41 3,680.1
Share of profit/ (loss) in associate 1.8 (2.0) NM (4.1) NM
Minority interest - - NM - NM
APAT 1,563 1,254 24.6 37 4,101.6
Adjustment (post-tax) - - NM - NM
RPAT 1,563 1,254 24.6 37 4,101.6

Margins and tax rate (%)

EBITDA 46.5 47.5 -106bps 58.9 -1240bps
EBITDA margins deteriorate
EBIT 42.0 45.2 -322bps 55.6 -1366bps
106bps YoY despite the fall Operating profits 41.4 44.7 -323bps 55.5 -1404bps
in total expenses (26.8% Operating profits (net of tax) 32.4 31.1 132bps 8.4 2403bps
YoY) as revenues declined PBT 85.7 55.5 3012bps 10.0 7569bps
PAT 67.0 38.6 2848bps 1.4 6569bps
28.3% YoY.
Tax rate (%) 21.8 30.4 -862bps 84.9 -6309bps
Source: Company, HSIE Research

Operating metrics
As % of QAAUM (bps) (Annualised) 1QFY21 1QFY20 YoY (%) 4QFY20 QoQ(%)
Revenue 51.8 58.4 -7bps 53.6 -2bps
Staff cost 15.9 14.8 1bps 10.3 6bps
Admin & other opex 9.7 11.3 -2bps 7.8 2bps
Core operating profit yields
Fee and commissions 2.1 4.5 -2bps 3.9 -2bps
declined sequentially to
EBITDA 24.1 27.8 -4bps 31.6 -7bps
21.5bps as against 33.6bps Operating profits 21.5 26.1 -5bps 29.7 -8bps
for HDFCAMC. Operating profits (net of tax) 16.8 18.2 -1bps 4.5 12bps
PBT 44.4 32.4 12bps 5.3 39bps
PAT 34.7 22.6 12bps 0.8 34bps
Source: Company, HSIE Research

Page | 2
Nippon Life India Asset Management: Results Review 1QFY21

Five quarters at a glance

MF QAAUM (Rs bn) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 YoY (%) QoQ (%)
Equity 935 871 899 861 684 (26.8) (20.5)
Equity QAAUMs declined Debt 690 598 552 574 522 (24.3) (9.0)
20.5% sequentially despite Liquid 334 275 327 328 342 2.5 4.4
the sharp recovery in the
ETFs 267 284 266 287 252 (5.6) (12.1)
market, indicating
Total 2,226 2,028 2,043 2,049 1,801 (19.1) (12.1)
redemptions remain high.

Retail AUM (Rs bn)* 863 519 546 444 460 (46.7) 3.7

Debt AUM declined as a Share in AUM (%)

result of redemptions and Equity 42.0 43.0 44.0 42.0 38.0 -400bps -400bps
write-down of stressed Debt 31.0 29.0 27.0 28.0 29.0 -200bps 100bps
credits.
Liquid 15.0 14.0 16.0 16.0 19.0 400bps 300bps
ETFs 12.0 14.0 13.0 14.0 14.0 200bps 0bps
Total 100.0 100.0 100.0 100.0 100.0
Management has decided to
invest only in AA and above Retail AUM as % of total
38.8 25.6 26.7 21.7 25.6 -1321bps 389bps
rated paper in all schemes AUM
except for the credit risk Source: Company, HSIE Research
* Beginning 2QFY20 AMFI changed the definition of “Retail investor” classification” has been changed to
fund. folio holding upto Rs 0.2mn from Rs 0.5mn earlier.

Equity QAAUM declined 20.5% QoQ

Rs bn Equity Debt Liquid ETFs

2,500
122 122 120 122
116 165 210
134 414 465 361 465 267
2,000 393 449
Equity QAAUM declined 424 444 284 266 287
334
275 327 328 252
26.8/20.5% YoY/QoQ despite 1,500
1,072 980 1,034 955 851 771 690 342
markets showed strong 1,026 1,088 598 552 574
1,000 522
recovery.
500 828 882 889 906 898 911 935 871 899 861
647 717 684
-
2QFY18

4QFY18

2QFY19

3QFY19

4QFY19

1QFY20

2QFY20

3QFY20

4QFY20

1QFY21
1QFY18

3QFY18

1QFY19

Source: Company, HSIE Research

Debt schemes losing share
% Equity Debt Liquid ETFs
100.0 6.0 5.0 5.0 5.0 5.0 5.0 7.0 9.0 12.0 14.0 13.0 14.0 14.0
Share of equity AUM in mix 17.0 17.0 19.0 15.0 19.0
80.0 19.0 19.0 19.0 15.0 14.0 16.0 16.0 19.0
has reduced considerably in
1QFY21 to 38.0% (-400bps 60.0 43.0 31.0 29.0 27.0
47.0 44.0 40.0 39.0 36.0 33.0 28.0 29.0
46.0
QoQ). 40.0

20.0 36.0 37.0 37.0 38.0 39.0 42.0 43.0 44.0 42.0 38.0
29.0 31.0 34.0
-
1QFY18

3QFY18

4QFY18

3QFY19

4QFY19

2QFY20

3QFY20

1QFY21
2QFY18

1QFY19

2QFY19

1QFY20

4QFY20

Note: As a percentage of QAAUM.

Source: Company, HSIE Research

Page | 3
Nippon Life India Asset Management: Results Review 1QFY21

Retail participation

Retail participation has Retail AUM (Rs bn) - LHS Retail AUM as % of total AUM - RHS

picked up meaningfully to 1,000 45.0

38.5 38.8
900 40.0
25.6% as market recovered. 34.2 35.1
800 32.4
29.1 29.9 35.0
700 26.2 27.5 25.6 26.7 25.6 30.0
600 21.7 25.0
500
20.0
400
300 15.0
200 10.0
100 584 637 710 732 780 837 830 899 863 519 546 444 460 5.0
- -

2QFY18

3QFY18

4QFY18

1QFY19

3QFY19

1QFY20

3QFY20

1QFY21
1QFY18

2QFY19

4QFY19

2QFY20

4QFY20
Source: Company, HSIE Research
Beginning 2QFY20 AMFI changed the definition of “Retail investor” to folio holding upto Rs 0.2mn
from Rs 0.5mn earlier.

SIP book declined QoQ

SIP Book (Rs bn) - LHS SIP (Rs/folio) - RHS

Monthly avg. SIP inflows 8.2 2,531 3,000

8.0 2,375
declined to Rs 7.0bn (-13.6/- 2,273 2,250 2,500
7.8 2,059
2.8% YoY/QoQ); Avg. SIP
7.6 2,000
contribution/folio is at Rs 7.4
2,059. 1,500
7.2
7.0 1,000
6.8
500
6.6
8.1 7.6 7.5 7.2 7.0
6.4 0
3QFY20

4QFY20
1QFY20

2QFY20

1QFY21

Source: Company, HSIE Research

As a % of QAAUM
Revenue Operating profits Operating profits (net of tax) PAT

80 71.5
66.0 66.9 65.5 65.6 63.9
Core operating profits were 70 59.2 59.3 59.4
58.8 58.4
21.5bps of QAAUM. 60 53.6 51.8
50
40 34.7
23.8 26.1 26.8 26.7 29.7
30 21.8 19.4 21.7 22.0 21.1 24.2
18.5 18.4 18.5 29.2 21.5
20 19.5 21.2 23.7 22.6
17.9 16.8 18.5 18.6
10 20.8 20.6 0.8
18.2
13.1 14.2 13.2 16.5 15.0 14.7 12.4 17.1 16.8
0
4.5
1QFY18

2QFY18

4QFY18

1QFY19

2QFY19

4QFY19

1QFY20

2QFY20

4QFY20

1QFY21
3QFY18

3QFY19

3QFY20

Source: Company, HSIE Research

Page | 4
Nippon Life India Asset Management: Results Review 1QFY21

C/I Ratio deteriorated materially

C-I Ratio (%)
80.0
69.2 68.3 69.1
70.0 65.3 64.1 64.8 66.2
C/I ratio deteriorated 58.8
significantly in 1QFY21 by 60.0 52.5 51.7 51.5 53.5
~1,240bps QoQ to 53.5% as 50.0
41.1
revenue dipped 15.1% QoQ. 40.0
30.0
20.0
10.0
-

1QFY18

2QFY18

4QFY18

1QFY19

3QFY19

4QFY19

2QFY20

3QFY20

1QFY21
3QFY18

2QFY19

1QFY20

4QFY20
Source: Company, HSIE Research

AUM Market share trend

Market share in QAAUM (%) Market share in Equity QAAUM (%)
%
Market share in Debt QAAUM (%)
14
NAM’s debt/equity QAAUM 13.1
market share declined to 13
12.0 12.1
7.5/6.8% (-246/-235bps YoY). 12
10.8
11 9.9
9.5 9.9
10 9.0
9.6 9.5 8.5 8.4 8.2
9 9.1 9.1 8.5
7.5
7.6 7.6
8 8.0 7.3
7.5 7.6 6.8
7
FY17 FY18 FY19 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21

Source: Company, HSIE Research

*FY17 and FY18 numbers have been taken on closing AUM basis.

Page | 5
Nippon Life India Asset Management: Results Review 1QFY21

Assumptions
FY19 FY20 FY21E FY22E FY23E
Closing AUM (Rs bn)
Mutual fund 2,278 1,635 2,281 2,848 3,289
We expect closing total MF Managed accounts 35 39 47 54 62
AUM to increase 39.5/24.9% Offshore funds and advisory 31 89 107 123 141
YoY in FY21/22E. Pension 1,878 830 1,038 1,204 1,396
Total 4,222 2,593 3,472 4,228 4,888

MF AAAUM (Rs bn)

Equity 901 891 772 954 1,113
Debt 795 603 554 684 792
Liquid 395 316 365 478 533
ETFs 190 276 266 329 385
Total 2,282 2,086 1,958 2,445 2,823
Growth (%)
Equity 17.3 (1.1) (13.4) 23.6 16.7
Debt (23.5) (24.1) (8.2) 23.3 15.8
Liquid (6.2) (20.0) 15.7 30.9 11.3
ETFs 48.7 44.8 (3.4) 23.5 17.1
Total (3.2) (8.6) (6.2) 24.9 15.5
Share(%)
Equity 39.5 42.7 39.4 39.0 39.4
Debt 34.9 28.9 28.3 28.0 28.0
Liquid 17.3 15.1 18.7 19.6 18.9
ETFs 8.3 13.2 13.6 13.5 13.6
Total 100 100 100 100 100

As % of MF AAUM (bps)
Revenue 64.8 57.7 52.2 47.8 46.8
Staff cost 12.9 14.5 15.9 13.8 13.1
Admin & other opex 12.7 8.1 6.2 5.4 5.0
Marketing expenses 4.3 2.6 2.7 2.4 2.2
Brokerage expenses 11.3 3.4 2.2 1.9 1.8
EBITDA 23.6 29.2 25.2 24.4 24.7
PBT-OI 23.2 27.3 22.9 22.7 23.3
We have fine tuned our
PBT-OI (net of tax) 16.1 20.3 17.2 17.1 17.6
estimates to increase
PBT 30.7 26.8 33.3 30.7 31.0
revenues by 1.3/2.3% for
APAT (post minority interest) 21.3 19.9 25.1 23.2 23.3
FY21E/FY22E.
Efficiency Ratios
C/I Ratio (%) 64.2 52.2 55.7 52.2 49.9
Tax Rate (%) 30.4 25.7 24.6 24.6 24.6
Source: Company, HSIE Research

Page | 6
Nippon Life India Asset Management: Results Review 1QFY21

Financials
Income statement
(Rs mn) FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
Net Revenues 11,999 13,074 15,918 14,786 12,030 10,229 11,689 13,218
Growth (%) 41.7% 9.0% 21.8% -7.1% -18.6% -15.0% 14.3% 13.1%
Employee benefits expenses 1,923 1,957 2,572 2,935 3,024 3,114 3,363 3,700
Operating expenses 5,911 6,451 8,250 6,461 2,921 2,178 2,361 2,548
EBITDA 4,166 4,665 5,096 5,390 6,085 4,936 5,965 6,971
EBITDA Margin (%) 34.7 35.7 32.0 36.5 50.6 48.3 51.0 52.7
EBIDTA Growth (%) 17.5% 12.0% 9.2% 5.8% 12.9% -18.9% 20.8% 16.9%
Depreciation 43 179 85 101 333 407 372 349
EBIT 4,122 4,486 5,011 5,290 5,753 4,530 5,593 6,622
Other Income (includes treasury ) 1,100 1,326 1,569 1,713 (98) 2,040 1,967 2,165
Interest & Financial Charges - - - - 57 55 49 44
PBT 5,222 5,812 6,579 7,002 5,598 6,515 7,511 8,742
Tax 1,242 1,786 1,984 2,132 1,441 1,603 1,848 2,151
RPAT 3,980 4,026 4,595 4,871 4,158 4,912 5,663 6,592
RPAT Growth (%) 12.4% 1.2% 14.1% 6.0% -14.6% 18.2% 15.3% 16.4%
APAT 3,980 4,026 4,580 4,861 4,158 4,912 5,663 6,592
APAT Growth (%) 12.4% 1.2% 13.8% 6.1% -14.5% 18.2% 15.3% 16.4%
AEPS 6.8 6.9 7.5 7.9 6.6 7.8 9.0 10.5
EPS Growth (%) 12.4% 1.2% 9.2% 6.1% -16.3% 18.2% 15.3% 16.4%
Source: Company, HSIE Research
Balance Sheet
(Rs mn) FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
SOURCES OF FUNDS
Share Capital 415 415 6,120 6,120 6,121 6,121 6,121 6,121
Reserves 17,504 18,311 17,533 19,580 19,809 20,953 23,601 26,717
Minority Interest 89 - 654 - - - - -
Total Shareholders Funds 18,008 18,726 24,307 25,700 25,931 27,074 29,722 32,838
Long-term Debt 1 - - - 591 725 616 554
Short-term Debt - - - - - - - -
Total Debt 1 - - - 591 725 616 554
Other Financial Liabilities & Provisions 110 216 297 435 393 336 384 435
Other Non Current Liabilities 1 - - - - - - -
Net Deferred Tax Liability (86) (37) (123) 0 (7) (7) (7) (7)
TOTAL SOURCES OF FUNDS 18,033 18,904 24,481 26,135 26,907 28,128 30,716 33,820
APPLICATION OF FUNDS
Net Block 119 2,512 2,603 2,568 3,256 3,118 3,079 3,030
Loans & Deposits 3,781 1,488 3,180 1,251 536 541 546 552
Other Non Current Assets 79 74 - - - - - -
Total Non-current Assets 3,979 4,074 5,783 3,819 3,792 3,659 3,625 3,582
Current Investments 9,108 9,465 9,934 12,900 18,846 20,730 22,803 25,083
Debtors 594 432 404 1,026 593 560 641 724
Cash & Equivalents 795 397 6,091 5,428 4,633 3,791 4,436 5,406
Loans & Advances 4,602 5,840 4,246 4,032 656 677 684 691
Other Current Assets 145 268 602 554 282 280 320 362
Total Current Assets 15,244 16,402 21,276 23,939 25,010 26,039 28,884 32,267
Creditors 650 1,083 1,329 474 677 588 673 760
Other Current Liabilities 539 489 1,249 1,150 1,218 981 1,121 1,267
Total Current Liabilities 1,190 1,572 2,578 1,623 1,895 1,569 1,793 2,028
Net Current Assets 14,054 14,830 18,698 22,316 23,115 24,469 27,091 30,239
TOTAL APPLICATION OF FUNDS 18,032 18,904 24,481 26,135 26,907 28,128 30,716 33,820
Source: Company, HSIE Research

Page | 7
Nippon Life India Asset Management: Results Review 1QFY21

Cash Flow
(Rs mn) FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
Reported PBT 5,224 5,813 7,258 7,002 5,598 6,515 7,511 8,742
Non-operating & EO Items (1,029) (1,339) (2,132) (1,479) 592 (2,040) (1,967) (2,165)
Interest Expenses - - - - - - - -
Depreciation 43 179 336 101 333 407 372 349
Working Capital Change (591) 2,474 364 355 1,025 (374) 140 147
Tax Paid (1,432) (1,580) (1,883) (1,924) (1,301) (1,603) (1,848) (2,151)
OPERATING CASH FLOW ( a ) 2,214 5,547 3,942 4,055 6,247 2,905 4,208 4,922
Net Capex (91) (2,572) (151) (85) (40) (269) (333) (300)
(Purchase)/sale of net operating financial assets - - - - - - - -
Free Cash Flow (FCF) 2,124 2,975 3,791 3,971 6,207 2,637 3,875 4,623
Investments (739) (1,002) 2,047 (1,295) (535) (1,885) (2,073) (2,280)
Non-operating Income 545 632 953 837 742 2,040 1,967 2,165
INVESTING CASH FLOW ( b ) (285) (2,942) 2,849 (542) 168 (113) (439) (415)
Debt Issuance/(Repaid) - - - - - - - -
Interest Expenses - - - - - - - -
FCFE 2,124 2,975 3,791 3,971 6,207 2,637 3,875 4,623
Proceeds From Issue of Share Capital - - 5,869 - 24 - - -
Dividend (1,737) (3,003) (6,686) (2,923) (4,427) (3,769) (3,015) (3,476)
Others - - (280) (1,253) (2,806) 134 (109) (62)
FINANCING CASH FLOW ( c ) (1,737) (3,003) (1,097) (4,176) (7,209) (3,635) (3,124) (3,537)
NET CASH FLOW (a+b+c) 193 (398) 5,694 (663) (794) (842) 646 970
Opening Cash & Equivalents 602 795 397 6,091 5,428 4,633 3,791 4,436
Closing Cash & Equivalents 795 397 6,091 5,428 4,633 3,791 4,436 5,406
Source: Company, HSIE Research
Key Ratios
FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
PROFITABILITY (%)
EBITDA Margin 34.7 35.7 32.0 36.5 50.6 48.3 51.0 52.7
EBIT Margin 34.4 34.3 31.5 35.8 47.3 43.8 47.4 49.8
APAT Margin 33.2 30.8 28.8 32.9 34.6 48.0 48.4 49.9
RoE 23.8 21.9 21.4 19.5 16.1 18.5 19.9 21.1
Core RoCE 66.5 65.1 81.1 96.8 140.9 135.4 166.0 205.3
RoCE 23.8 21.9 21.4 19.5 16.1 18.5 19.9 21.1
EFFICIENCY
Tax Rate (%) 23.8 30.7 30.2 30.4 25.7 24.6 24.6 24.6
Asset Turnover (x) 126.1 9.9 6.2 5.7 4.1 3.2 3.8 4.3
Debtors (days) 18 12 9 25 18 20 20 20
Other Current Assets (days) 4 7 14 14 9 10 10 10
Payables (days) 20 30 30 12 21 21 21 21
Other Current Liab & Prov (days) 16 14 29 28 37 35 35 35
Working Capital (days) -14 -24 -36 -1 -31 -26 -26 -26
Debt/EBITDA (x) 0.00 - - - 0.10 0.15 0.10 0.08
Net D/E (0.0) (0.0) (0.3) (0.2) (0.2) (0.1) (0.1) (0.1)
Interest Coverage - - - - - - - -
PER SHARE DATA
AEPS (Rs/sh) 6.8 6.9 7.5 7.9 6.6 7.8 9.0 10.5
CEPS (Rs/sh) 6.8 7.2 7.6 8.1 7.2 8.5 9.6 11.1
DPS (Rs/sh) 2.5 4.2 5.0 6.0 5.0 4.8 5.6 6.5
BV (Rs/sh) 30.5 31.9 38.6 42.0 41.4 43.2 47.5 52.5
VALUATION
P/E 39.9 39.4 36.1 34.0 40.7 34.4 29.8 25.6
P/BV 8.9 8.5 7.0 6.4 6.5 6.2 5.7 5.1
EV/NOPLAT 49.6 49.8 42.5 39.9 34.4 42.8 33.9 27.9
OCF/EV (%) 1.4 3.6 2.6 2.8 4.3 2.0 3.0 3.6
FCF/EV (%) 1.4 1.9 2.5 2.7 4.3 1.8 2.7 3.3
FCFE/MCAP (%) 1.3 1.8 2.2 2.3 3.7 1.6 2.3 2.7
Dividend Yield (%) 0.9 1.6 1.9 2.2 1.9 1.8 2.1 2.4
Source: Company, HSIE Research

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Nippon Life India Asset Management: Results Review 1QFY21

RECOMMENDATION HISTORY
Nippon India TP Date CMP Reco Target
500 9-Jul-19 221 BUY 254
13-Jul-19 219 BUY 254
450
30-Jul-19 227 NEU 235
400 22-Sep-19 254 NEU 267
14-Oct-19 267 NEU 240
350 25-Oct-19 319 NEU 260
9-Jan-20 343 NEU 320
300
11-Jan-20 343 NEU 321
250 24-Jan-20 347 NEU 321
2-Mar-20 391 ADD 440
200 11-Apr-20 287 BUY 349
21-Apr-20 285 BUY 349
150
16-May-20 243 BUY 288
100 13-Jul-20 290 REDUCE 271
Oct-19
Jul-19

Aug-19

Jul-20
Jan-20

Apr-20
Sep-19

May-20
Mar-20
Dec-19

Jun-20
Nov-19

Feb-20

28-Jul-20 270 REDUCE 280

From 2nd March 2020, we have moved to new rating system

Rating Criteria
BUY: >+15% return potential
ADD: +5% to +15% return potential
REDUCE: -10% to +5% return potential
SELL: > 10% Downside return potential

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Nippon Life India Asset Management: Results Review 1QFY21
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