SIPs Hit Record Highs Even as Market Losses Drag Down AMC Profits
India’s mutual fund industry demonstrated remarkable resilience in the March 2026 quarter, with systematic investment plan (SIP) flows surging to record highs even as a brutal market correction hammered asset management companies’ bottom lines. A fresh results preview by Nomura paints a picture of an industry with strong structural foundations — but one not immune to short-term pain.
SIPs Smash Records as Investors Buy the Dip
In what may be the clearest sign yet of India’s maturing investor base, SIP inflows hit an all-time high of Rs 321 billion in March 2026, up 28% year-on-year and 8% month-on-month. Nomura notes that “MF investors hurried to take advantage of corrected valuations,” with equity inflows ex-arbitrage jumping 20% month-on-month to Rs 452 billion — well above the FY26 average of Rs 379 billion.
This is a significant behavioural shift. Rather than fleeing a falling market, retail investors doubled down. Passive inflows — equity index funds and ETFs — surged a staggering 312% month-on-month to Rs 301 billion, suggesting investors are increasingly comfortable with low-cost, market-tracking products.
The MTM Problem: Strong Operations, Weak Profits
Here is where it gets complicated for AMC shareholders. The BSE500 and Nifty50 both fell roughly 14% in the quarter, and that mark-to-market damage has carved deep into reported profits. Nomura warns that MTM losses “should result in negative other income for companies under coverage,” dragging PAT growth quarter-on-quarter by -17%, -22%, and a staggering -91% for NAM, HDFC AMC, and UTI AMC respectively.
The underlying operating business, however, tells a far healthier story. Operating profit before tax is expected to grow a solid 35%, 20%, and 13% year-on-year for NAM, HDFC AMC, and UTI AMC. The message is clear: the franchise is growing, but investment portfolios are taking a temporary hit.
NAM Leads the Pack on Market Share
Nomura’s preferred pick remains Nippon India Asset Management (NAM), with a Buy rating and a target price of Rs 1,050. The brokerage says it prefers NAM “on account of its higher AUM growth and strong market share gains,” with NAM picking up 5 basis points of equity market share in March alone and 26 basis points over the trailing twelve months. HDFC AMC, also rated Buy with a target of Rs 2,950, comes in second. Both firms beat the benchmark in over 80% of AUM across three-year and five-year performance windows. UTI AMC carries a Neutral rating.
What the Stocks Are Worth
| Company | CMP (Rs) | Target Price (Rs) | Upside | Rating |
|---|---|---|---|---|
| HDFC AMC | 2,619 | 2,950 | 13% | Buy |
| NAM | 955 | 1,050 | 10% | Buy |
| UTI AMC | 966 | 1,175 | 22% | Neutral |
Source: Nomura
The Big Picture
For long-term investors, the industry’s quarterly average AUM still grew 0.7% despite flat equity markets, passive AUM is up 23% year-on-year at Rs 14.1 trillion, and the SIP engine shows no signs of slowing. The short-term profit pain at AMCs is largely a mark-to-market accounting matter. If anything, the record SIP numbers suggest India’s wealth-building culture is now structural — dips are being bought, not feared.