In a largely downward moving and volatile equity environment that has prevailed over the past 18 months, investors would expect a segment that is closely linked to the fortunes of the markets to underperform.

Listed players in the ₹81-lakh crore mutual fund industry have defied wars, geopolitical tensions, penal trade tariffs, AI-led disruptions etc. that have shaken markets over the past 1.5 years, and have thrived.

Most domestic asset management companies (AMCs) have not only delivered robust returns over this period, but are also trading at a valuation premium to the broader markets.

AMCs and wealth management companies delivered 14-65 per cent returns from September 2024 to March 2026, while the Nifty 500 TRI fell 7.5 per cent in this timeframe.

And barring one player, other AMC stocks trade at trailing twelve months’ PE (price earnings) multiple of 23.8 times to 46.3 times, while the Nifty 500 TRI trades at a PE of 23.5 times. The lone wealth management firm taken here commands a TTM PE of 73 times.

Interestingly, within the AMC space, the top mutual fund houses command a substantial valuation premium over the others in the listed space.

Explaining the outperformance

Despite the fall in the markets and the general negativity around equities, the mutual fund industry has been able to pull in assets at a robust clip.

HDFC, Nippon Life India and ICICI Prudential saw their average quarterly assets under management as of December 2025 grow 17.5-23.2 per cent year on year.

The likes of UTI, Canara Robeco and Aditya Birla Sun Life saw assets swell 11.5-15.5 per cent over the same period.

This growth in assets has also been accompanied by expanding profits. All AMCs witnessed growth in profits. The leading ones saw up to 29 per cent growth in TTM net profit growth.

Anand Rathi Wealth, too, managed a TTM net profit growth of 29 per cent.

UTI and Nippon Life India alone experienced single-digit growth in profits.

The sustainability of these valuations will depend on inflows into fund houses remaining steady, especially via the SIP route and AMCs continuing nimble operations to deliver above-average profit growth. A serious job-loss scenario in the broader economy due to AI-led disruptions, a prolonged war that induces inflation and sustained weakness in the markets may test this healthy run.

Divergence in valuations

It is also noticeable that on the PE metric and the market capitalisation to AUM parameter, there is considerable difference between the top three listed players and the next three.

One key reason for this premium lies in the market share the larger AMCs pull in.

ICICI Prudential, HDFC and Nippon Life India make up over 33 per cent of the total asset management in the industry and they accounted nearly 38 per cent of the inflows over December 2024-December 2025 period.

In contrast, the other three players accounted for 11 per cent of the industry’s assets and just about 9 per cent of the inflows in the last one year.

ICICI Prudential (with leadership in large-cap, value and opportunities) and HDFC (flexi-cap, mid- and small-cap) have most of their equity and hybrid schemes in the top quartile of those categories.

Nippon Life India has leadership in mid- and small-caps, passive funds with its gold and silver ETFs enjoying the highest AUM in the industry.

Aditya Birla Sun Life and UTI have a patchy equity fund record in recent years, which explains their lower inflows. Canara Robeco does have a few funds in the top or mid quartiles, though some have faced the brunt of the recent sharp correction in the broader markets.

Published on March 7, 2026