Prabhudas Lilladher’s research report from October 20, 2025, suggested an add rating on UTI Asset Management Company with a target price of Rs 1400.
Due to increased staff costs brought on by a one-time effect of Rs250 million relating to VRS, UTIAM’s core income of Rs1.33 billion missed PLe by 20%, resulting in a bad quarter.
Implemented on October 1st, 25th, VRS provides departure benefits to qualified workers; 479 are eligible. Payout will average between Rs. 6.0 and Rs. 6.5 million. In Q3FY26, the full cost of VRS will be recorded in the P&L. We raise staff costs and total operating expenses by 15% and 25%, respectively, thus not all qualified workers may take VRS.
We cut core PAT for FY26/27/28E by 16.5%/3.7%/5.5% due to a combination of weaker AAuM growth for FY27/28E and higher staff costs for FY26, which were caused by poor equity performance that resulted in a smaller market share. At 15x on Sep. 27 core EPS, the valuation indicates a about 57% discount to NAM.
Prospects
We keep the multiple at 16x and the TP at 1,400, but we switch the rating from “BUY” to “ACCUMULATE.”