UTI Asset Management Company Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives

3 Sandeep Samsi, Vetri Subramaniam, Vinay Lakhotia

Analysts

9 Abhijeet Sakhare, Chirag, Divij Punjabi, Jagannatham, Krunal Shah, Mohit Mangal, Sagar Doshi, Shreyas Pimple, Uday Pai

Financials & KPIs

Geographic & Segment Commentary

• Mutual Fund (Domestic): Industry QAAUM reached ₹84,18,486 crores in June 2026 (+12.6% YoY) with ~28 crore folios. UTI's QAAUM stood at ₹3,92,691 crores with a 70% equity mix; added 3.89 lakh folios (1.42 crore total) and 2.51 lakh new investors across 699 districts. Large & mid-cap and mid-cap funds saw positive net flows, while flexi cap saw net redemptions despite a rising SIP pipeline. Digital purchase transactions grew 23.93% YoY to 60.9 lakh in June 2026.

• Pension (UTI Pension Fund Limited): AUM grew ~13% YoY to ~₹4.31 lakh crores, managing 24.16% of NPS industry AUM (vs 24.67% in Q1 FY26). Achieved an industry-first MoU between a pension fund and a farmer producer organisation; expanded partnerships across MSME bodies, agricultural cooperative banks, self-help groups, tea plantation workers and women-led communities. Headcount expected to more than double over the next 18 months, predominantly in sales.

• International (UTI International): AUM of USD 1.48 billion (₹14,027 crores) across 30+ countries. Flows have been negative for ~2 years due to weak India sentiment and scheme performance, which management views as cyclical. Global pipeline advancing: emerging markets strategy discussions, GIFT City outbound product initiative, and first US institutional roadshow for private credit; future growth to favour alliances over fixed cost build-out.

• Alternatives (UTI Alternatives): Total commitments of active funds (incl. co-investment) at ₹3,843 crores vs ₹2,679 crores in June 2025; six active funds across performing credit and multi-strategy. SDOF IV at ₹887 crores AUM (₹900 crores commitments secured); MOF I ₹1,599 crores; MOF II ₹321 crores; Real Estate Opportunity Fund I ₹189 crores. GIFT City pooled vehicles at USD 206 million; dedicated head of private equity appointed.

• PMS & EPFO: PMS AUM at ₹12,15,000 crores and EPFO AUM at ₹10,63,000 crores as of 30 June 2026. The revised EPFO mandate and consequent asset transfer reduced PMS AUM by ₹3,16,000 crores QoQ; fee impact is marginal and already reflected in Q1 numbers.

Company-Specific & Strategic Commentary

• Mission 2031 & AUM Ambition: Management reiterated the Mission 2031 strategy to build a larger, more competitive, technology-enabled, investor-centric organisation; believes existing investments in people, technology and distribution support managing 2x current AUM, with the critical requirement being equity flow market share exceeding stock market share.

• Sales Reorganisation & Workforce: Post-VRS reorganisation achieved a 4-4.5 supervisory-to-feet-on-street ratio; Gen Z share of workforce rose from 5% in 2021 to 39%, with Gen Z + Gen Y comprising 80% of the sales team. Standalone AMC headcount expected to remain flat.

• Digital & Customer Experience: AI voice assistant VAANI handles over 60% of inbound calls; Google digital marketing partnership reached 10+ crore unique individuals over the past nine months; Mumbai customer experience channel launched for direct investor engagement; Salesforce-based sales and marketing automation in place.

• Distribution Expansion: Presence across 699 districts; strengthened engagement with banks, national distributors, MF distributors and wealth partners through fund manager interactions, distributor education programmes and data-driven sales initiatives.

• Product & Global Pipeline: Regulatory approvals received for UTI Nifty 500 ETF/index fund and UTI BSE Index Sector Leaders ETF; balanced hybrid fund and sectoral debt funds in pipeline; SIF and GIFT City outbound funds expected in H2 FY27; emerging markets strategy discussions ongoing.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Revenue Yields, TER Impact & NCI

• Question: What are the yields across equity, hybrid, ETF, and liquid funds? Was the 5 bps exit load impact absorbed or passed on? Why is non-controlling interest zero? (Uday Pai, Mohit Mangal)
• Answer: Q1 FY27 yields: equity/hybrid ~72-73 bps, ETF/index ~8 bps, cash/arbitrage ~12 bps, fixed income ~20 bps. The TER/exit load impact has been fully passed on to intermediaries with no dilution to margins. NCI turned zero as SDOF II returned capital and UTI sold part of its stake in SDOF III, ending the consolidation requirement. (Vinay Lakhotia)

Scheme Flows & Product Diversification

• Question: Was there redemption pressure in the top equity schemes? How is the strategy to diversify beyond the flagship funds progressing? (Mohit Mangal, Divij Punjabi)
• Answer: Flexi cap saw negative net sales but encouraging gross sales and an improving SIP pipeline; large & mid-cap and mid-cap funds recorded positive net inflows. Large & mid-cap is pushing ~3-3.5% share of industry net sales in that strategy, and hybrids (ex-sunset products) average 2-3% of industry net sales, reflecting the diversification strategy's progress. (Vinay Lakhotia, Vetri Subramaniam)

International Business Outlook

• Question: How should we view the international business, which has been under pressure for several quarters? (Mohit Mangal)
• Answer: International is a sales and distribution business for UTI's domestic investment capabilities across 38+ licensed geographies. Negative flows over the past two years reflect weak India sentiment and scheme performance - a cyclical issue. An India-based manager with local investment capabilities should capture share when dedicated India allocations return. (Vetri Subramaniam)

Mission 2031 Targets, Brand USP & Customer Segmentation

• Question: What quantitative targets are set under Mission 2031? What are UTI's USPs and target customer segments? (Shreyas Pimple)
• Answer: Management sees scope to manage 2x current AUM with existing investments; the key requirement is ramping equity flow market share above stock share. USPs are 60-year legacy/trust, strong investment process, and engagement. Targeting first-time and younger investors: SIP registrations in the 18-25 age group rose 18.6% QoQ to 98,127 in Q1 FY27, and the 26-40 group grew 6.8% in new SIPs and 11.4% in new clients; digital visibility is critical for resonating with younger cohorts. (Vetri Subramaniam, Sandeep Samsi)

Cost Structure & FY27 Cost Guidance

• Question: Why were employee costs and other opex muted? What is the run-rate expectation? Will costs creep up next year? (Shreyas Pimple, Krunal Shah, Abhijeet Sakhare)
• Answer: The Q3 FY26 VRS reduced the employee cost run rate. Guidance maintained: ~₹95 crores/quarter standalone and ~₹130 crores/quarter consolidated employee costs; other expenses targeted at 8-10% growth over FY26 as major IT/digital spends are complete, barring possible AI initiatives. FY28 guidance will be assessed after this year. (Vinay Lakhotia)

Capital Allocation: Dividend, Buyback & M&A

• Question: With cash at ~40% of market cap, what would trigger a buyback? Is there M&A optionality? (Chirag, Divij Punjabi, Jagannatham)
• Answer: Buyback is not on the table and there is no constraint; the bigger challenge is growing market cap quickly. Dividend payout of >95% is expected to continue. Management maintains a cash buffer for bolt-on acquisition optionality (AMC, alternatives or international) given the promoter-less structure, but there are no active talks. (Vetri Subramaniam, Vinay Lakhotia)

Employee Count Increase & Subsidiary Hiring

• Question: Employee count rose from 1,435 to 1,512 QoQ - what explains this? (Divij Punjabi)
• Answer: The increase is in subsidiaries - UTI Pension (private pension expansion) and UTI Alternatives (private equity and real estate capability building); the standalone AMC headcount is slightly lower. Pension headcount will more than double over the next 18 months, funded without denting pension profitability. (Sandeep Samsi, Vinay Lakhotia, Vetri Subramaniam)

Pension & International ROI

• Question: How should we evaluate the ROI on investments in UTI Pension and UTI International given expenses are hitting the P&L? (Krunal Shah)
• Answer: Pension is "hugely profitable" with 15-year money at lower margins; management prioritises rupee profit growth and reinvestment for growth over near-term operating leverage. International's net worth is 4x the original investment; the last major headcount expansion was the 2024 US entry, and future scaling will favour alliances over fixed cost build-out. (Vetri Subramaniam)

Growth Outlook & NFO Pipeline

• Question: How will you grow AUM and arrest market share loss? What new products are planned? (Sagar Doshi)
• Answer: Market share loss stems from redemptions in performance-challenged strategies; where performance is strong, flow share matches or exceeds stock share. Pipeline includes UTI Nifty 500 ETF/index fund and UTI BSE Index Sector Leaders ETF (regulatory approval received), balanced hybrid fund, sectoral debt funds, plus SIF and GIFT City outbound funds in H2 FY27. (Sandeep Samsi, Vinay Lakhotia, Vetri Subramaniam)

Key Takeaway

UTI AMC reported a stable Q1 FY27 with consolidated core revenue of ₹379 crores (flat YoY) and core PAT of ₹129 crores (up 6% YoY, 31% QoQ), aided by post-VRS cost benefits. The MF franchise's QAAUM reached ₹3,92,691 crores with a 70% equity mix, adding 3.89 lakh folios and 2.51 lakh new investors; SIP AUM rose 8.05% YoY to ₹45,595 crores. Pension AUM grew 13% YoY to ₹4.31 lakh crores and alternatives commitments rose to ₹3,843 crores, though PMS AUM fell ₹3,16,000 crores QoQ on the revised EPFO mandate with only marginal fee impact. Management maintained cost guidance and reiterated Mission 2031's 2x AUM ambition, which depends on lifting equity flow market share above stock share. Key watch points include investment performance turnaround in flexi cap, international flow recovery, NFO pipeline execution (Nifty 500 ETF, balanced hybrid, GIFT City outbound funds), and subsidiary hiring intensity.