UTI AMC

UTI AMC reported a significant 50% YoY increase in Core PAT to ₹132 crore for Q2 FY25, significantly outperforming the 28% growth in consolidated core revenue. This margin expansion reflects the company's success in managing its cost base while benefiting from higher AUM. Standalone PAT also grew by 50% YoY to ₹201 crore, demonstrating strong performance in the primary AMC business.

The company's SIP AUM reached a milestone of ₹39,882 crore, growing over 50% YoY, with average ticket sizes increasing to ₹3,297. Passive strategies continue to be a major growth engine, with Index and ETF QAAUM rising 47% YoY to ₹145,135 crore. While these are lower-yield products (6-7 bps), management emphasizes the absolute profit contribution from this high-volume business.

Management has provided a clear roadmap for employee cost containment, targeting a modest 2-3% growth at the standalone level for FY25. This is being achieved through 'natural retirement' of senior, high-cost employees and their replacement with management trainees. The company maintains a long-term guidance that employee costs will remain on a declining trajectory through FY2029.

UTI is aggressively scaling its subsidiaries, with UTI Pension Fund AUM growing 24.6% YoY to ₹3.36 lakh crore and maintaining a 25.12% market share in the NPS industry. UTI International is expanding its global footprint with new offices in New York and Paris to tap into institutional capital, despite the associated short-term increase in establishment and rental costs.

Despite the rapid growth of lower-yield passive funds, UTI has maintained stable yields in its active equity and hybrid segments at approximately 75-76 basis points. Management noted that while they are exploring commission rationalization, they have not yet reduced distributor commissions on existing stock AUM, choosing instead to focus on marginal sharing ratios for fresh inflows.