UTI AMC Q1 Results Review - Remains Cheapest Asset Manager Play: Yes Securities

Yes Securities Report

UTI Asset Management Company Ltd.'s calculated revenue yield was stable even after unfavorable product mix change:

The share on equity quarterly average assets under management and Hybrid QAAUM in total QAAUM was down sequentially by -63 basis points and -11bps respectively.

On the other hand, the share of exchange traded fund and Index fund QAAUM in total QAAUM was up by 126 bps sequentially. The revenue yield of Equity and Hybrid funds is much higher than ETF and Index fund’s yield. However, even after the unfavorable product mix change the calculated revenue yield for the quarter has remain stable sequentially.

Higher operating efficiency leads to better operating margin:

The Equity QAAUM has grown by 4.5% QoQ and Hybrid QAAUM has grown by 5.4% QoQ. Even after sequential business growth in key fund segments the employee cost in Q1 FY25 was down by -2.5% QoQ and other operating expense was down by - 9.4% QoQ. The total opex in 1Q was down -5.1% QoQ. This has led to an improvement in operating margin which came in at 47.1% in 1Q up by 617 bps QoQ and 653bps YoY.

We maintain an ‘Add’ rating on UTI AMC with an unchanged price target of Rs 1225.

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