Target: ₹1,200
CMP: ₹924.50
UTI Asset Management has delivered a largely stable MF QAAUM (quarterly average asset under management) in Q4-FY26 at ₹3.9 lakh crore (-1.4% q-o-q), despite market volatilities. However, revenue at ₹375 crore fell about 5 per cent q-o-q on dip in revenue yields to 39.1bps driven by shift in mix towards passive funds. Q4 EBITDA margin stood at 39.3 per cent, but was impacted by higher other expenses.
During FY26, the company undertook multiple initiatives—including expanding geographic presence, investments in technology, strengthening the sales force, and deepening distributor relationships—while maintaining focus on cost.
Growing the MF AUM remains the single-line strategic priority of the management. Further, the management emphasised that growing the SIP book would remain the core agenda and the key metric for the sales team. Investments in digital capabilities are likely to drive new SIP registrations, led by the young cohort. Also, with growth in AUM, the management remains focused on managing costs and increasing efficiency.
To bake in the Q4 developments, we tweak our estimates which results in about 2-3 per cent cut in PAT over FY27-28E owing to higher other expenses. Going forward, consistent investment performance and sustained flows led by an expanding distribution network remain key to driving AUM growth.
We maintain Add on UTI Asset Management while raising Mar-27E target price by about 9 per cent to ₹1,200 (from ₹1,100) implying FY28E P/E of 18x.