UTI AMC 4QFY26 Result Final Take: Soft 4Q; Current valuations cap downside risk; maintain LONG

By PNI Admin On Apr 25, 2026

UTI AMC (UTIAMC) reported a net loss of Rs 514mn in 4QFY26 (EE: Rs 1.01bn profit), due to a higher-than-expected other income loss of Rs 1.48bn (EE: Rs 337mn loss). MF revenue yields declined 0.6bps qoq to 31.2bps, while employee expenses rose 13.6% yoy to Rs 1.32bn and other expenses increased 17.8% yoy to Rs 944mn

Overall MF QAAUM declined 1.4% qoq (+14.3% yoy) to Rs 3.89trn. Equity QAAUM fell 3.3% qoq to Rs 1.36trn, with its share in total QAAUM moderating to 35.0% (3Q: 35.7%). Equity QAAUM-based market share further declined by ~9bps qoq to 2.88%.

Management indicated that standalone employee expenses are likely at ~Rs 950mn per quarter going ahead, while consolidated employee expenses at Rs 1.25bn-1.30bn per quarter. We build in employee expenses of Rs 5.24bn/5.87bn for FY27E/FY28E.

We cut our FY27/FY28 EPS estimates due to lower AUM growth and weaker other income assumptions. We model an 11% equity MF AQAAUM CAGR over FY26-FY28E. The stock currently trades at ~16x FY28E EPS, offering limited downside. Maintain LONG with a Mar’27 TP of Rs 1,185 set at 18x FY28E EPS.

Net flows in core equity schemes remain negative: UTIAMC’s MF QAAUM declined 1.4% qoq (+14.3% yoy), with equity QAAUM falling 3.3% qoq. Net sales in core equity schemes remained negative, with outflows widening to Rs 3.82bn vs Rs 3.04bn qoq. Monthly SIP flows improved to Rs 8.52bn, while market share in monthly systematic flows inched up 2bps qoq to 2.66%. Within hybrid schemes, flows remained positive, rising to

Rs 2.5bn vs Rs 830mn qoq. Core equity performance over the 3-year period remains weak, and we expect market share losses to persist in the near term. We factor in ~11% MF equity AQAAUM CAGR over FY26-FY28E.

MF yield slips 0.6bps qoq to 31.2bps; employee costs stay high: In 4QFY26, operating revenue declined ~5% qoq to Rs 3.75bn, reflecting lower overall AUM. MF revenue yields fell 0.6bps qoq to 31.2bps. We build in MF revenue yields of 30.2bps/29.0bps for FY27E/FY28E (FY26E: ~32.3bps). Employee expenses rose 13.6% yoy to Rs 1.32bn. Management indicated that standalone employee expenses are likely at ~Rs 950mn per quarter going ahead, while consolidated employee expenses at Rs 1.25bn-1.30bn per quarter. We build in employee expenses of Rs 5.24bn/Rs 5.87bn for FY27E/ FY28E.

View: Performance of major equity schemes remains weak over the 3-year period, and we believe market share losses shall persist in the near term. The stock currently trades at ~16x FY28E EPS, offering limited downside. We build in an 11% equity MF AQAAUM CAGR and ~23% EBITDA CAGR over FY26-FY28E, led by operating leverage. The stock also offers a healthy dividend yield of ~4-5%. Maintain LONG with a Mar’27 TP of Rs 1,185 (vs Mar’27 TP of Rs 1,340 earlier), based on an unchanged 18x FY28E EPS. Key risks: Adverse trends in equity markets, a sharp decline in revenue yields and continuation of net outflows.