Motilal Oswal Initiates Coverage on UTI AMC with a Price Target of Rs 1,270

UTI AMC's Revenue Growth Trails Estimates in Q4, Despite Strong FY26 Performance

UTI Asset Management Company (UTI AMC) has reported its quarterly results for the fourth quarter of fiscal year 2026, reflecting a growth of 4% year-over-year (YoY) in revenue from operations, which came in at INR 3.7 billion. However, this growth was offset by a decline of 5% quarter-over-quarter (QoQ).

The company's yield on management fees stood at 38.6 basis points (bp) in the fourth quarter of fiscal year 2026, down from 42.4 bp in the corresponding period of the previous fiscal year and 40.1 bp in the third quarter of fiscal year 2026. For the fiscal year 2026, the yield on management fees came in at INR 15.4 billion, representing a growth of 7% YoY.

Operating expenses (opex) for UTI AMC increased to INR 2.3 billion, marking a growth of 10% YoY and 6% QoQ. As a percentage of the Average Assets Under Management (AUM), opex stood at 23.4 bp in the fourth quarter of fiscal year 2026, compared to 24.3 bp in the corresponding period of the previous fiscal year.

Read also: Reliance Consumer Products Posts FY26 Revenue of Rs 22,000 Crore

The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) for the fourth quarter of fiscal year 2026 came in at INR 1.5 billion, missing estimates by 11% due to higher other expenses. The EBITDA margin for the quarter stood at 39.3%, down from 42.6% in the fourth quarter of fiscal year 2025 and 45.6% in the third quarter of fiscal year 2026.

Key Financial Metrics Comparison

We reiterate our BUY rating for UTI AMC, with a one-year target price of INR 1,270, based on a price-to-earnings ratio of 24 times the company's fiscal year 2028 estimated core earnings per share.

Read also: JioStar Posts Q4 Revenue of Rs 9,784 Crore, EBITDA at Rs 827 Crore