Buy UTI AMC; target of Rs 1250: Motilal Oswal

Motilal Oswal's research report on UTI AMC

UTI AMC’s 4QFY25 operating revenue stood at INR3.6b (in line), up 13% YoY/down 4% QoQ. For FY25, it grew 22% YoY to INR14.5b. Yield on management fees stood at 42.4bp in 4QFY25 vs. 43.7bp in 4QFY24 and 42.6bp in 3QFY25. Total opex was up 10% YoY/12% QoQ to INR2.1b. As bp of QAAUM, costs decreased YoY to 24.3bp from 25.8bp in 4QFY24 (vs. 21bp in 3QFY25). EBIDTA was up 18% YoY/down 20% QoQ at INR1.5b (10% miss), while EBIDTA margins stood at 42.6% vs. 41% in 4QFY24 and 50.8% in 3QFY25. PAT declined 44% YoY/41% QoQ to INR1b (24% miss) due to lower-thanexpected other income and higher costs. For FY25, PAT was flat YoY at INR8.1b.

Outlook

We expect UTI to report a CAGR of 16%/13%/19% in AUM/revenue/core PAT over FY25-27E. The stock trades at FY26E P/E of 14x and core P/E of 22x. We reiterate our BUY rating with a one-year TP of INR 1,250 (based on 23x core FY27E EPS).

For all recommendations report, click here