Buy UTI AMC; target of Rs 1550: Motilal Oswal

Motilal Oswal's research report on UTI AMC

UTI AMC’s fund performance over the past five months has improved considerably, with an average of ~70% equity AUM appearing in Q1 and Q2 on a one-year return basis in May’25 vs an average of 25% in the preceding 12 months. This, we believe, can drive equity market share gains, which have been stable at 3.9% over the past seven months. Recent product launches (Quant Fund launched in Q4FY25 and Multi-Cap Fund in Apr’25) are likely to support equity inflows. Ongoing traction in hybrid funds and the rollout of smart beta and thematic offerings further enhance UTI AMC’s positioning across investor segments. UTI AMC’s SIP AUM grew 22% YoY to INR375.9b, supported by increased investor engagement through MFDs and direct platforms. Despite weaker markets, SIP inflows in FY25 rose 23% YoY to INR83.3b. Notably, 47.9% of equity/hybrid gross sales were mobilized through digital platforms in Q4FY25, reflecting the success of platform integration and marketing automation.

Outlook

We expect UTI AMC to report AUM/Revenue/Core PAT CAGR of 17%/13%/20% over FY25-27. Sustained strong performance has been a key re-rating driver for AMC stocks. UTI AMC’s discount to other players has widened over the past few months. We reiterate our BUY rating on UTI AMC with a one-year TP of INR1,550, based on 19x FY27E EPS (28x Core EPS).