Buy UTI Asset Management Company, target price Rs 1050: HDFC Securities
UTI Asset Management Company Ltd., incorporated in the year 2002, is a Small Cap company (having a market cap of Rs 10918.25 Crore) operating in Financial Services sector.
By ETMarkets.com | Updated:
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HDFC Securities has buy call on UTI Asset Management Company with a target price of Rs 1050. The current market price of UTI Asset Management Company is Rs 835.15. Time period given by analyst is one year when UTI Asset Management Company Ltd. price can reach defined target.
UTI Asset Management Company Ltd., incorporated in the year 2002, is a Small Cap company (having a market cap of Rs 10918.25 Crore) operating in Financial Services sector.
UTI Asset Management Company Ltd. key Products/Revenue Segments include Sale of services, Income From Financial Services, Income From Sale Of Share & Securities, Interest, Rental Income and Dividend for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 304.98 Crore, down -1.16 % from last quarter Total Income of Rs 308.56 Crore and up 4.10 % from last year same quarter Total Income of Rs 292.98 Crore. Company reported net profit after tax of Rs 53.91 Crore in latest quarter.
Investment Rationale
UTIAM reported a weak quarter despite improvement in equity yields, given a sharp rise in staff costs and administration expenses, resulting in a 15% miss on core operating profit. Moderating yields and elevated staff costs continue to drag core profitability (EBIT margin at 36%, a five-quarter low). While the brokerage draws comfort from management commentary around a buoyant flows environment and a strong growth outlook for the retirement solutions business, it remains wary of continued pressure on yields and staff costs in the medium term. It reduces APAT estimates by 10-9 % over FY23E-24E to build in higher employee costs. It expects UTIAM to deliver FY21-24E 7% revenue CAGR and 8% operating profit CAGR, as a consequence of strong AUM growth and slight cost rationalisation. Given its attractive valuation, it maintains BUY with a revised TP of INR1050 (26.5x Sep-23E NOPLAT + Sep-22E cash and investments).
Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of 31-Mar-2022, while FIIs owned 39.68 per cent, DIIs 50.07 per cent.
UTI Asset Management Company Ltd., incorporated in the year 2002, is a Small Cap company (having a market cap of Rs 10918.25 Crore) operating in Financial Services sector.
UTI Asset Management Company Ltd. key Products/Revenue Segments include Sale of services, Income From Financial Services, Income From Sale Of Share & Securities, Interest, Rental Income and Dividend for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 304.98 Crore, down -1.16 % from last quarter Total Income of Rs 308.56 Crore and up 4.10 % from last year same quarter Total Income of Rs 292.98 Crore. Company reported net profit after tax of Rs 53.91 Crore in latest quarter.
Investment Rationale
UTIAM reported a weak quarter despite improvement in equity yields, given a sharp rise in staff costs and administration expenses, resulting in a 15% miss on core operating profit. Moderating yields and elevated staff costs continue to drag core profitability (EBIT margin at 36%, a five-quarter low). While the brokerage draws comfort from management commentary around a buoyant flows environment and a strong growth outlook for the retirement solutions business, it remains wary of continued pressure on yields and staff costs in the medium term. It reduces APAT estimates by 10-9 % over FY23E-24E to build in higher employee costs. It expects UTIAM to deliver FY21-24E 7% revenue CAGR and 8% operating profit CAGR, as a consequence of strong AUM growth and slight cost rationalisation. Given its attractive valuation, it maintains BUY with a revised TP of INR1050 (26.5x Sep-23E NOPLAT + Sep-22E cash and investments).
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Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of 31-Mar-2022, while FIIs owned 39.68 per cent, DIIs 50.07 per cent.
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