Earnings Outlook
UTI AMC seen posting 68% YoY rise in PAT on revenue growth
This story was originally published at 17:14 IST on 22 October 2024
Register to read our real-time news.Informist, Tuesday, Oct. 22, 2024
By Christina Titus
MUMBAI – UTI Asset Management Co Ltd.'s standalone net profit in Jul-Sept is expected to rise 68.2% on year to INR 2.26 billion, led by growth in revenue, according to an average of estimates from four brokerages. Sequentially, the net profit is seen rising 21.7%. The company reported a net profit of INR 1.86 billion in the quarter ended June, up 13% on year.
Among the brokerages, YES Securities had the highest estimate for net profit at INR 2.50 billion and Kotak Institutional Securities the lowest at INR 1.93 billion. Despite its upbeat estimate, YES Securities expects earnings before interest, tax, depreciation and amortisation of the asset management company to deteriorate sequentially due to higher employee costs and a fall in other income.
The standalone revenue from operations of the mutual fund is expected to rise over 17% on year to INR 3.65 billion for the Jul-Sept quarter. However, brokerages see a fall in revenue on a sequential basis. The company posted revenue from operations at INR 3.87 billion in the last quarter. All four brokerages expect the company's revenue to shrink sequentially. The revenue in Jul-Sept is seen declining 5.7% from a quarter ago.
The assets under management of the company stood at INR 19.36 trillion as of Jun. 30 with equity assets contributing 78% to the total average assets. Most of the brokerage firms expect the assets under management for Jul-Sept to witness growth, with Nuvama Wealth Management expecting growth in UTI AMC's assets under management to be lower than that of its peers. The estimates of growth in the assets under management of the company from the four brokerages are in the range of 9.9-14.4%.
"We believe that trends as of September will be dependent on the trends seen till August, while we additionally factor in the Nifty Return of 2.3% and Nifty Mid-cap 100 return of 1.5% for September. We pencil in an overall AUM (assets under management) growth of 10.4% QoQ (quarter-on-quarter)," YES Securities said. Overall assets under management for the company grew 9.5% as of Aug. 30 compared with Jun. 30, it said.
Kotak Institutional Securities projected a 10% growth in overall assets under management and equity to assets to rise by 12% on quarter. It also said that the company would continue to witness weak flows across major categories despite mark-to-market gains.
The company is scheduled to announce its earnings on Friday.
The key monitorables would be cost control, equity assets under management and equity net inflow market shares, and yields, according to Nuvama.
On Tuesday, shares of the company ended 4.1% lower at INR 1,223.35 on the National Stock Exchange.
Following are the Jul-Sept earnings estimates for UTI Asset Management Co based on estimates compiled by Informist from four brokerage firms:
| BROKERAGE | NET INTEREST INCOME (in INR million) | NET PROFIT(in INR million) |
| Kotak Institutional Equities | 3,555.00 | 1,934.00 |
| Nuvama Wealth Management Ltd | 3,666.00 | 2,489.00 |
| Prabhudas Lilladher Pvt Ltd | 3,649.00 | 2,121.00 |
| YES Securities (India) Ltd | 3,717.00 | 2,499.00 |
| Average | 3,646.75 | 2,260.75 |
End
Edited by Saji George Titus
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