Shares of UTI Asset Management Company Ltd (UTI AMC) surged more than 11 per cent during the trading session on Tuesday to hit a new 52-week high after the company announced a strong set of numbers in the December 2023 quarter. The company announced its earnings on Monday. UTI AMC's net profit more than tripled in the quarter ended on December 31, 2023 on a year-on-year (YoY) basis. The company's bottomline came in at Rs 185.70 crore in the Q3FY24, compared to a net profit of Rs 60.43 crore in the year ago period, said the filing. Total revenue from operations grew more than 52 per cent on YoY to Rs 449.05 crore in October-December 2023 period, compared to Rs 295.15 crore in the same period previous financial year. Ebitda for the quarter rose 138 per cent to Rs 274 crore in the latest quarter against Rs 115.14 crore in the corresponding period previous fiscal. The total assets under management (AUM) of the company stood at Rs 17.6 lakh crore for the quarter ended December 31, 2023. This includes UTI Mutual Fund's average assets under management (AUM) of Rs 2.73 lakh crore. Following the announcement, shares of UTI Asset Management Company surged about 11.25 per cent to Rs 965 on Tuesday, hitting a new-52 week high and commanding a total market capitalization of close to Rs 12,000 crore. The scrip had settled at Rs 867.55 on Monday. The stock is up about 60 per cent from its 52-week lows. However, brokerage firms are not gung-ho on the counter even after three-fold rise in the net profit but a few remain positive on the stock. However, global brokerage firm Citi has maintained a 'sell' tag on the stock with a target price of Rs 815 per share. Domestic brokerage firm Kotak Institutional Equities said that UTI AMC’s core earnings remained weak given muted revenue growth and higher expenses. Other income jumped sharply due to MTM gains, leading to beat on headline earnings. "Negative trends continued on key operational items, that is weakening fund performance, equity outflows and dip in SIP flow share We retain 'reduce' rating with unchanged fair value of Rs 900. Valuations are reasonable but there is less visibility of a turnaround in key performance metrics," it said. UTI AMC posted weak numbers as equity closing MF AUM grew just 7.8 per cent QoQ despite strong market action during the period on the back of weak equity performance and net outflows. Revenue grew just 2.2 per cent, below estimates. Core operating profit declined as expenses continue to remain elevated, said Nuvama Institutional Equities. "Strong other income, led by market action, led to an in-line adjusted PAT of Rs 186 crore. We tweak estimates and increase FY25E/26E by 0.5 per cent/0.2 per cent, respectively. Maintain 'buy' with unchanged target price of Rs 1,020. Current valuations inexpensive at FY25/26E," it added.
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