Buy UTI Asset Management Company; target of Rs 1050: Prabhudas Lilladher

Prabhudas Lilladher is bullish on UTI Asset Management Company has recommended buy rating on the stock with a target price of Rs 1050 in its research report dated April 27, 2024.

Broker Research

April 29, 2024 / 19:44 IST

buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on UTI Asset Management Company

UTIAMC saw good quarter as revenue beat PLe by 4.6% led by higher blended yields at 43.7bps (PLe 41.8bps). Due to one-time staff cost, core income was in-line at 15.9bps. AMC yields reverted back to 34bps from 32.6bps in Q3’24 led by rise in equity yields followed by income and cash/arbitrage yields. Uptick was due to adjusting overestimated distributor payout and cessation of B-30 commissions upon approval w.e.f. 1st Feb’24. Excess balance sheet cash has been an investor concern which is being partially addressed due to increasing dividend payout which enhanced from 60.6% in FY23 to 74.4% in FY24. Opex leverage could benefit UTIAMC and we envisage opex/AuM to fall from 28bps to 23bps over FY23-26E.

Outlook

We trim core income for FY25/26E by 2%/6% due to 6%/8% rise in opex. Stock is valued at 14.6x suggesting a 50% discount to NAM. Rolling forward to Mar’26 core EPS we tweak multiple from 17.2x to 17.6x and increase TP from Rs900 Rs1,050. Retain ‘BUY’.

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