'Add' UTI AMC Shares Maintains ICICI Securities On Attractive Valuations

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ICICI Securities Report

Valuation remains cheap compared to peers

Basis current current market price, UTI Asset Management Company Ltd. is trading at 16.6x on FY27E core P/E vs 38.8x/35.3x/20.8x FY27E core P/E for HDFC AMC/Nippon Life/Aditya Birla Sun Life.

We factor in ~15% end-to-end MF AUM growth for 10MFY26E/FY27E and a decline of ~2bps in standalone MF investment income yields from the base of Q4FY25 (34.7bps), which results in a standalone revenue CAGR of 11.3% for FY25–27E.

We expect standalone opex to grow at a CAGR of 7.1% in FY25–27E vs a CAGR of 2.6% between FY22–25.

We factor in standalone core Ebitda/core PAT to have CAGRs of 14.7%/15.6% between FY25–27E.

The subsidiaries of UTI, over the years, have not contributed anything meaningfully to the overall consolidated core PBT. The difference between consolidated core PBT and standalone core PBT for UTI has been Rs 410 million/510 million/651 million in FY25/24/23.

We assume ~Rs 350 million of contribution from the subsidiaries, ex-other income, in FY26–27E.

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