Buy UTI Asset Management Company; target of Rs 1300: Prabhudas Lilladher

Prabhudas Lilladher is bullish on UTI Asset Management Company has recommended buy rating on the stock with a target price of Rs 1300 in its research report dated May 02, 2025.

Broker Research

May 05, 2025 / 12:02 IST

Buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on UTI Asset Management Company

UTIAM saw a soft quarter as core income missed PLe by 7% led by higher opex. Revenue yields were in-line at 42.2bps (PLe 42.4bps) as AMC yield was stable QoQ at 33.9bps. Equity performance in 1-yr bucket has been consistently improving since Mar’24, and 59% of equity AUM is in quartile 1 & 2 as of Mar’25. A dilution of 1-2bps is expected in yields which will be cushioned by commission rationalization carried out in Q4FY25. Staff cost is guided to grow by 3%/5% at the standalone/consol level; we envisage other opex to grow at an 11% CAGR over FY25-27E.

Outlook

Due to operating leverage, opex/AuM could fall from 24bps to 21bps over FY25-27E, which would translate to a core PAT CAGR of 15%. Stock is valued at 10.5x suggesting a 62% discount to NAM. We tweak multiple to 16x and TP to 1,300 as we roll forward to Mar’27 core EPS. Retain ‘BUY’.

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