Motilal Oswal bullish on THIS AMC stock, sees 35% upside

AMC Stock to BUY: Shares of UTI Asset Management Company (UTI AMC) were in focus on Thursday even as the stock slipped in early trade. The stock was trading at Rs 1,028.20, down Rs 6.10, or 0.59 per cent.

The attention comes after Motilal Oswal reiterated its bullish view on the stock and maintained a Buy rating, citing strong long-term fundamentals and improving flow momentum. The brokerage has set a one-year target price of Rs 1,400, implying an upside of around 35 per cent from current levels.

Q3 results highlights

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UTI AMC reported a 20 per cent year-on-year decline in consolidated profit after tax to Rs 121 crore for the December quarter. The company had posted a profit of Rs 151 crore in the same quarter last year.

However, on a normalised basis, excluding exceptional items, profit rose sharply. Normalised PAT increased 43 per cent year-on-year to Rs 216 crore.

Total income for the quarter rose 23 per cent year-on-year to Rs 518 crore, compared with Rs 420 crore a year earlier. The growth was driven by higher revenue from operations.
On a standalone basis, profit declined 13 per cent year-on-year to Rs 124 crore in Q3 FY26. Total income on a standalone basis rose 28 per cent to Rs 424 crore.

AUM growth remains healthy

UTI AMC’s total group assets under management stood at Rs 23.1 lakh crore, up 11 per cent year-on-year. Mutual fund AUM rose 12 per cent to Rs 3.9 lakh crore.

Non-mutual fund AUM increased 11 per cent to Rs 19.2 lakh crore. PMS AUM grew 10 per cent to Rs 14.9 lakh crore. UTI Capital AUM rose 15 per cent to Rs 31,000 crore, while pension AUM increased 19 per cent to Rs 4.1 lakh crore. International AUM declined 30 per cent year-on-year to Rs 20,500 crore.

Brokerage view

Motilal Oswal said UTI AMC continues to deliver steady and broad-based performance across mutual fund, pension, and international businesses. The brokerage highlighted consistent AUM growth, a diversified product mix, strong equity orientation, healthy SIP inflows, and solid retail participation.

The brokerage added that improvement in equity scheme performance will be key for higher equity contribution and better yields. It noted that earnings in FY26 will be impacted by the voluntary retirement scheme, but this should lead to cost savings from FY27 onwards.

Motilal Oswal expects UTI AMC to deliver a compound annual growth rate of 15 per cent in AUM, 11 per cent in revenue, and 15 per cent in core PAT over FY25–FY28. Based on this outlook, it values the stock at 17 times FY28 estimated earnings and maintains a target price of Rs 1,400.