Synopsis : JP Morgan has initiated coverage on India’s capital-market ecosystem with a bullish stance, arguing that strong SIP inflows, rising domestic participation and supportive tax policies continue to drive long-term growth despite weak benchmark returns and sustained foreign investor selling. The brokerage has named Angel One, CAMS and ICICI AMC as its preferred picks, while remaining cautious on CDSL and MCX due to valuation concerns.
JP Morgan turns positive on India's capital-market ecosystem
Global brokerage JPMorgan Chase has initiated coverage on India's capital-market sector with a constructive outlook, highlighting the resilience of domestic investor participation as a key structural growth driver.
In its June 23 report, the brokerage noted that monthly SIP inflows reached ₹31,000 crore in May 2026, representing a 48% increase despite subdued market performance. Over the past two years, the Nifty 50 has delivered a CAGR of only 0.8% in rupee terms and a negative 3.2% CAGR in US dollar terms. During FY25 and FY26, foreign portfolio investors sold approximately $36 billion worth of Indian equities, equivalent to around ₹3.3 lakh crore.
Despite these headwinds, cumulative net inflows into equity and balanced mutual funds stood at ₹9.43 lakh crore, underscoring the growing influence of domestic investors.
JP Morgan believes this trend reflects a structural shift rather than a temporary phenomenon and remains the cornerstone of its positive view on the sector.
SIPs remain the backbone of market growth
The brokerage emphasized that systematic investment plans have become the primary source of equity fund flows in India.
According to the report, SIP contributions accounted for nearly 77% of total equity and balanced-fund net inflows during FY26. Monthly SIP inflows touched ₹31,000 crore in May, even as benchmark indices struggled to generate meaningful returns.
JP Morgan highlighted that the consistency of these flows during periods of volatility suggests a maturing retail-investor base that continues investing regardless of short-term market fluctuations.
The brokerage also pointed to favorable tax treatment as another supportive factor. Equity investments currently attract a 12.5% long-term capital gains tax rate, while changes such as the removal of indexation benefits, taxation of insurance policy proceeds and slab-rate taxation of debt mutual funds have improved the relative attractiveness of equity investments.
Angel One emerges as JP Morgan's top pick
JP Morgan's preferred stock in the sector is Angel One.
The brokerage initiated coverage with an "Overweight" rating and assigned a March 2027 target price of ₹420, implying approximately 18% upside from current levels.
The report highlighted Angel One's strong earnings-growth outlook, estimating a FY26-28 earnings-per-share CAGR of 35.6%. JP Morgan also noted that the company trades at a FY27 estimated P/E multiple of 23.9x, making it one of the most attractive risk-reward opportunities within the sector.
According to the brokerage, low-cost retail brokers benefit significantly from scale advantages, and Angel One is well-positioned to capture further market-share gains.
While JP Morgan acknowledged regulatory risks related to derivatives trading, it believes the overall impact remains manageable under its base-case assumptions.
CAMS remains the preferred mutual-fund infrastructure play
JP Morgan has also initiated coverage on Computer Age Management Services with an "Overweight" rating.
The brokerage assigned a target price of ₹950, implying approximately 17% upside potential.
Although mutual-fund registrar and transfer agent businesses generally have lower pricing power and operating leverage than exchanges or brokers, JP Morgan believes CAMS offers an attractive combination of business quality, market leadership and execution capabilities.
The report projects an FY26-28 earnings CAGR of 20.4% for CAMS.
ICICI AMC completes the top three picks
JP Morgan's third preferred stock is ICICI Prudential Asset Management Company.
The brokerage assigned an "Overweight" rating and a target price of ₹4,090, implying around 21% upside.
JP Morgan believes asset-management companies offer a relatively stable earnings profile because revenues are linked to assets under management rather than trading activity.
The report forecasts approximately 20% earnings growth for ICICI AMC between FY26 and FY28 and sees continued SIP growth as a significant long-term tailwind.
Positive on Nippon Life AMC and HDFC AMC
JP Morgan also initiated coverage on:
- Nippon Life India Asset Management with an "Overweight" rating and target price of ₹1,360.
- HDFC Asset Management Company with an "Overweight" rating and target price of ₹3,250.
Both companies are expected to benefit from increasing mutual-fund penetration and sustained domestic savings flowing into financial assets.
Neutral stance on BSE and KFin Technologies
JP Morgan assigned "Neutral" ratings to:
- BSE Limited with a target price of ₹4,330.
- KFin Technologies with a target price of ₹960.
The brokerage acknowledged the strength of both businesses but believes current valuations already reflect much of the near-term growth potential.
For KFin Technologies, JP Morgan specifically stated that it would prefer a more attractive entry point before becoming constructive.
CDSL and MCX receive Underweight ratings
The only two stocks to receive "Underweight" ratings were:
- Central Depository Services Limited with a target price of ₹1,200.
- Multi Commodity Exchange of India with a target price of ₹2,550.
JP Morgan's caution stems primarily from valuation concerns.
The brokerage noted that CDSL trades at a significantly higher valuation relative to its projected earnings growth, resulting in the highest PEG ratio within its coverage universe.
Similarly, while MCX has benefited from strong growth in commodity trading volumes, the brokerage believes much of this optimism is already reflected in the stock price.
Exchanges remain JP Morgan's preferred business model
At a broader business-model level, JP Morgan ranks capital-market businesses in the following order of preference:
- Exchanges
- Depositories
- Brokers
- Asset managers
- Mutual-fund RTAs
According to the brokerage, exchanges and depositories enjoy stronger pricing power and superior operating leverage. Brokers benefit from scale-driven economics, while AMCs offer lower cyclicality because revenues are linked to assets under management. RTAs, meanwhile, operate largely as B2B service providers and therefore have comparatively lower pricing flexibility.
Conclusion
JP Morgan's initiation report reflects growing confidence in India's long-term financialization story. Despite weak benchmark returns and persistent foreign selling, domestic investors continue to channel record amounts into mutual funds through SIPs, creating a strong structural tailwind for the capital-market ecosystem.
Among listed plays, the brokerage's highest conviction lies in Angel One, CAMS and ICICI AMC, while it remains cautious on highly valued names such as CDSL and MCX. The central theme running through the report is clear: domestic participation is increasingly becoming the dominant force in Indian capital markets, and companies positioned to benefit from that trend are likely to remain attractive over the coming years.
Disclaimer : The brokerage ratings, target prices and projections mentioned above are those of JP Morgan and are intended for informational purposes only. They should not be construed as investment advice or a recommendation to buy or sell securities. Investors should conduct their own research and consult a SEBI-registered investment advisor before making investment decisions.
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