Asset Management Companies – Sector Update – Fragmentation increasing in the AMC sector
Published on 18 Sep 2026
Due to weak equity returns, 1-year weighted alpha over the last year across major MF players has reduced, leading to fragmentation in net equity flows. Contribution of top 3/10 players in net flows (ex-NFOs) has fallen from 42%/73% in FY26 to 34%/65% over Apr-Jul’26. Listed AMCs are underperforming as (1) sub-optimal returns are affecting market share in net equity flows; (2) global/macro uncertainty may lead to weak equity returns; and (3) core PAT growth in FY27 may be soft at 10% YoY. In contrast, non-AMC players like PRUDENT & KFINTECH have performed better over last 3-6 months due to more diversified revenue stream. Non-AMCs are likely to post superior core PAT CAGR vs listed AMCs over FY26-29E. While the AMC space is exposed to near-term risks, we are optimistic over the medium term as listed AMCs could see healthy core PAT CAGR of ~16% over FY27-29E. HDFCAMC & ICICIAMC remain our preferred picks.
