UTI AMC Q4 Results Review - Management Backs Equity Fund Strategy: Yes Securities

Yes Securities Report

There was a sequential improvement in UTI Asset Management Company Ltd.'s revenue yield due to improved yield across categories: The yield in the cash and arbitrage funds has improved 2 basis points to 11 bps. The yield in the income funds has improved about 1.5 bps to 22 bps. The yield for the equity funds has improved 5 bps QoQ. The equity yield has improved due to payout being lower than estimated commission and B-30 trail commission not being paid in March.

UTI AMC commentary indicated that the equity business would improve going forward: Some of the large equity funds have a quality growth bias but management is confident of the ability of these funds to perform over a full market cycle.

The value oriented strategies have worked out well. The company also has a plan to launch new funds, which should help the business.

We maintain an ‘Add’ rating on UTI with a revised price target of Rs 1100: We value UTI at 17.6 times FY26 price/earning at which it would trade at a FY26 price/ book of 2.9 times.

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