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Lower-than-expected other income and higher 

operating costs lead to a miss on PAT

* Overall MF QAAUM rose 17% YoY/declined 4% QoQ to INR3.4t. Equity/ ETFs/Index/Debt funds grew 7%/17%/43%/14% YoY.

* Revenue from operations stood at INR3.6b (in line), resulting in a 13% YoY growth/a 4% QoQ decline. For FY25, revenue rose 22% YoY to INR14.5b.

* Yield on management fees came in at 42.4bp in 4QFY25 vs 43.7bp in 4QFY24 (42.6bp in 3QFY25).

* Total opex came in at INR2.1b registering a growth of 10% YoY. As bp of QAAUM, the cost decreased YoY to 24.3bp in 4QFY25 from 25.8bp in 4QFY24 (vs. 21bp in 3QFY25).

* EBITDA stood at INR1.5b (10% miss) in 4QFY25 (+18% YoY and down 20% QoQ) and EBITDA margins stood at 42.6% in 4QFY25 v/s 41% in 4QFY24 and 50.8% in 3QFY25.

* Other income came in at INR 158m (15% miss) resulting in a decline of 85% YoY and 65% QoQ.

* PAT stood at INR1b in 4QFY25 (24% miss), down 44% YoY and 41% QoQ. For FY25, it remained flat YoY to INR8.1b

* The Board has approved a final dividend of INR26/share and an additional special dividend of INR22/share, totaling INR48/share.

Valuation and view

* Improving fund performance and scaling up non-MF business will improve profitability over the medium term. We expect UTIAMC to report a CAGR of 16%/13%/18% in AUM/revenue/core PAT over FY25-27. Assuming a 74% dividend payout ratio, we expect the company to generate a cumulative operating cash flow of INR31.2b during the same period.

* We reiterate our BUY rating with a TP of INR1,250, based on 23x FY27E core EPS.

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