UTI Asset Management Company Ltd (UTIAMC) Q2FY27 Concall Transcript - Sep-2026 Qtr
Farah: Ladies and gentlemen, good day, and welcome to the UTI Asset Management Company Limited Q2 and H1 FY '27 earnings conference call. From the management, we have with us Mr. Vinay Lakhotia, Chief Financial Officer and Head Corporate Strategy; and Mr. Sandeep Samsi, Head Investor Experience and Corporate Affairs. We also have the investor relations team from Adfactors PR. As a reminder, all participants' lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference, please signal for an operator by pressing star followed by zero on your touch-tone telephones. I now hand the conference over to Mr. Sandeep Samsi for opening remarks. Thank you, and over to you, sir.
Sandeep Samsi (UTI Asset Management Company Ltd): Thank you, Farah. Good evening, everyone, and thank you for joining us today. Due to an urgent family exigency, Mr. Vetri Subramaniam, our MD & CEO, will not be able to join today's earnings call. I have Mr. Vinay Lakhotia, CFO & Head of Corporate Strategy along with me on this call. Our financial results for the quarter and half year ended 30th September, 2026, along with the investor presentation and press release have been shared on the stock exchanges as well as on our website, and we trust you had the opportunity to review them. Before we discuss our financial performance, I would like to cover three key areas: first, the microeconomic macroeconomic environment and the broader mutual fund industry backdrop; secondly, the progress we have made against our strategic priorities during quarter two of FY '27 and in the first half of the financial year; and finally, why we remain confident in UTI AMC's long-term growth trajectory and opportunities ahead. Speaking on the macroeconomic environment, the quarter two of FY '27 witnessed resilient domestic activity with quarter one GDP growth at 7.8% supported by manufacturing and services sector. However, West Asia tension and crude oil volatility heightened inflationary pressures, with retail inflation rising to 5.54% in September '26. This month the RBI also raised the repo rate to 5.50% and projected FY '27 GDP growth at 7.
Sandeep Samsi (UTI Asset Management Company Ltd): Despite quarter end market volatility, domestic investors participation remain resilient. Equity oriented schemes attracted rupees 92,333 crores in quarter two of FY 27, taking the first half of FY 27 inflows to 1.83 lakh crores. In September 26, the equity inflows stood at rupees 38,307 crores, while the monthly SIP contribution reached a record 32,490 crores, with the SIP AUM being at 17.86 lakh crores for the industry. Small and mid cap funds accounted for 44% of the September equity inflows, while flexi cap, multi cap, large and mid cap, and large cap funds accounted another 41%. Industry quarterly average AUM rose to 87.2 lakh crores from 83.1 lakh crores in quarter one of FY 27, with ETF recorded net inflows of rupees 15,501 crores in September 26. For UTI, the underlying message is encouraging. Even though short term volatility is an inherent part of equity investing, the structural drivers of the mutual fund industry, including the economic growth, rising income, broader investor participation, and financialization of household savings remain intact. Keeping this opportunities in mind, our focus remains on translating the industry structural growth potential into a substantial growth for UTI AMC and capturing a larger share of industry flows. Under our Mission 2031, we are looking to work across five interconnected priorities: accelerating AUM growth, strengthening our SIP franchise, expanding distribution reach, deepening digital capabilities, and delivering better outcomes for investors. Turning to our business performance, our mutual fund quarterly average AUM for quarter two of FY 27 stood at rupees 4.02 lakh crores, compared with 3.93 lakh crores in quarter one of FY 27, representing a market share of 4.61%. Our total group AUM stood at rupees 16.28 lakh crore as of September 30th, 2026. Equity-oriented assets across active and passive strategies accounted for 72% of our average mutual fund AUM, compared with approximately 70% in the previous quarter. Our SIP franchise remains resilient, with a combined monthly SIP and STP inflows standing at rupees 982 crores in September of '26. Our SIP AUM stood at rupees 45,572 crores as of September 30, 2026, broadly stable as compared with rupees 45,595 crores in June of '26. This reinforces our focus on systematic investment as a driver of sustainable growth. The gross SIP inflows were rupees 2,583 crores during this quarter as and 5,085 crores during the half year of FY 27. Furthermore, we registered 5.96 lakh new SIPs during quarter two of FY 27, of which 87% were sourced through digital channels. In quarter two of FY 27, our live folio base stood at 1.47 crores and we added 3.6 lakh new investors as identified by their PANs. During the half year, we added 6.12 lakh investors. UTI Mutual Fund share of industry new SIP registration by volume stood at 4.08% in quarter two. This is an encouraging indicator of our efforts to improve participation in new business. The next step is to build on this momentum consistently, strengthen conversions across distribution channels and digital platforms, and translate new investor acquisitions into sustained SIP contributions and long term partnerships. On the financial performance, on the financial front, the consolidated core revenue from the sale of service stood at rupees 398 crores for quarter two of FY 27, compared to 390 crores with in the corresponding quarter last year. While the core profit after tax was rupees 131 crores. For H1 of FY 27, core revenue stood at rupees 777 crores and core profit after tax at rupees 263 crores. Our focus remains on growing the business while maintaining operating discipline and ensuring that growth translates into sustainable profitability. On strengthening investment capabilities and product propositions, the quality of our investment outcomes is highlighted through our experienced team, renewed talent base and stronger client-facing capabilities.
Sandeep Samsi (UTI Asset Management Company Ltd): companies. We evaluated 36 IPOs and participated in six, while continuing to invest in research infrastructure and talent. These efforts deepen our understanding of business, strengthen investment decisions, and support better outcomes for investors over the long term. On our equity scheme performance, several of our funds have demonstrated an improvement in performance over the last quarter, with 51% of our equity and hybrid funds ranked in quarter one or quartile one or quartile two on a three-month basis as of September '26, while on our fixed income schemes, 97% of our AUM, including liquid funds, were in the top two quartiles over a three-month period, while 61% was in the top two quartiles over a one-year period, reflecting performance of our fund management capabilities across different investment horizons. We broadened our product offering across active and passive strategies. During quarter two of FY '27, we launched the UTI Balanced Hybrid Fund and four passive products linked to the NIFTY 500 and BSE India Sector Leaders indices. Our NIFTY 500 Index Fund and the BSE India Sector Leader Index Fund established encouraging positions within their respective categories. These developments expand the range of products available to our investors and distributors, while strengthening our capability to participate across investment needs and market segments. Going forward, the focus will be on building awareness, improving product reach, and ensuring that product innovation contributes meaningfully to sustainable business growth. On our additional growth engines, building diversified growth engines remains an important pillar of our long-term strategy. We have received SEBI approval for our specialized investment fund, SIF, initiative and will be launching the UTI Classique Hybrid Long-Short Fund in the quarter three of FY '27. In our alternatives business, the first investment for the late-stage private equity fund was signed, while SDOF IV crossed Rs. 1,000 crores. Our pension fund onboarded 169 new corporates between April '26 and October '26, and our in- international business continued to pursue product initiatives across markets, including the US, Singapore, UAE, and GIFT City. These initiatives broaden our opportunities sets beyond the core mutual fund franchise. Expanding the distribution and strengthening the digital capabilities are key to capturing a larger share of the industry growth. During the quarter two of FY '27, 80.30% of our AMC mutual fund AUM was contributed by the top 30 cities, while B30 accounted for 19.7% of the AUM. We onboarded 10 new fintech partners and continued building digital infrastructure, while advancing data analytics and automation to simplify investor journey, improving investor service efficiency, and strengthening conversion. Our fintech partners facilitated approximately 1 lakh transactions during the quarter two of FY '27, and these partners have contributed 67% of the new investor acquisition. Operating efficiency remains a key to scaling our business. Process optimization generated approximately 4.22 crores in savings, while automation is reducing manual intervention. As we invest in talent, technology, and distribution, our focus remains on improving productivity, maintaining cost discipline, and strengthening operating leverage. Our people remain central to our Mission 2031 initiative. We continue to invest in the organizational capability, with 10,690 training hours delivered to the sales team up to September of '26, while strengthening performance management and identifying critical talent for development and retention. With that, I will now take you through the operational and financial performance of the company in greater detail. The financial highlights for quarter two and half year of FY '27 are as follows, beginning with the performance of quarter two. On a standalone basis, the core income, which is the sale of service, amounted to Rs. 324 crores, up by 2% YoY and 5% QoQ. The core core profit after tax for the quarter is Rs. 136 crores, up by 30- 31% YoY and 14% QoQ. The profit after tax stood at Rs. 143 crore, down by 14% YoY and 34% QoQ. On a consolidated basis, the core income, the sale of service, amounted to Rs. 398 crores, up by 2% YoY and 5% QoQ. The core profit after tax for the quarter is Rs. 131 crores, up by 22% YoY and 2% QoQ. The profit after tax stood at Rs. 132 crores, up by 17% YoY and down by 55% QoQ. For the half year of FY '27, the
Sandeep Samsi (UTI Asset Management Company Ltd): The core income amounted to Rs 632 crore, up by 1% YoY. The core profit after tax for the half year is Rs 253 crore, up by 14% YoY. The profit after tax stood at Rs 361 crore, down by 5% YoY. On a consolidated basis, the core income amounted to Rs 777 crore, up by 1% YoY. The core profit after tax for H1 FY27 is Rs 263 crore, up by 15% YoY. The profit after tax stood at Rs 426 crore, up by 22% YoY. For UTI Pension Fund Limited, our 100% owned subsidiary, UTI Pension Fund has recorded a year-on-year growth of approximately 10.97% in its AUM, reaching approximately 4.32 lakh crore as on 30th September 2026 as compared to 3.89 lakh crore as on 30th September 2025. It currently manages approximately 24.01% of the NPS industry's AUM. UTI International, which represents our international business has an AUM of US$1.67 billion, which is approximately Rs 16,063 crore as on 30th September 2026. Our international clients are spread across more than 30 countries and are primarily institutions, pensions, insurance companies, banks and asset managers. UTI Investment is actively exploring strategic partnership opportunities with leading asset managers in key international markets, including East Asia and Latin America as part of its broader strategy to strengthen its global distribution network, expand its international presence and enhance access to Indian investment opportunities for investors worldwide. UTI Alternatives AUM has grown to approximately Rs 4,045 crore, up 52% from Rs 2,669 crore as of September 2025. This AUM represents commitment for funds in the commitment period and net capital for funds in the post-commitment period. It also includes the co-investment portfolio managed by UTI Alternatives. UTI SDOF 4 has crossed the Rs 1,000 crore milestone launched in quarter three of FY '26 as the fourth fund in our SDOF series. The fund is planned as a 1,500 crore with a greenshoe option of Rs 500 crore. It already has reached an AUM of Rs 1,131 crore and is currently in raising and investing stage. UTI Alternative currently manages six active domestic funds across performance performing credit and multi-strategy teams along with two GIFT City feeder funds. UTI Multi Opportunities Fund 1 has an AUM of approximately 1,599 crore as of September 2026 and is currently in investing stage. UTI Multi Opportunities Fund 2 has a total commitment of Rs 359 crore as of September and is currently in raising and investing stage. UTI SDOF 3 which has an AUM of Rs 533.6 crore is in repayment stage. As we enter the second half of FY '27, our priorities are clear. Improve our participation in industry flows, strengthen our SIP franchise, deepen distribution productivity, maintain competitive investment capabilities, and build greater efficiency into our operations. Mission 2031 provides the direction. Our task is to translate that direction into sustained flows in AUM and inflows, strong stronger profitability and better outcomes for our investors. With this, we would like to open the forum for question-and-answer session. Thank you.
Farah: Thank you very much, sir. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone who wishes to ask a question, may enter "*" followed by "1" on the touchtone telephone. If you wish to remove yourself from the question queue, you may enter "*" followed by "2" . Participants are requested to please use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please enter "*" and "1". The first question is from the line of Devesh Punjabi from Banyan Tree Advisors. Please go ahead.
Devesh Punjabi (Banyan Tree Advisors): Yeah, hi. Thanks for the opportunity. I had two questions. First is on the net sales. Net sales in this quarter has, net outflow has gone up a lot,
Devesh Punjabi (Banyan Tree Advisors): employee base also has come down, to some extent, in quarter two. So, is this going to continue or is this the stable rate that is going to be there going ahead?
Sandeep Samsi (UTI Asset Management Company Ltd): Yeah, Devesh, thank you for the question. On the first part, I'll answer and then I'll hand it over to Vinay for the second part on the employee. So, as we have mentioned earlier, flexi cap remains still the, you know, challenge for us, while you know the inflows, we have seen some inflows in flexi cap, but there have been large outflows also in the fund. And that remains a fund which is which we are focusing on. However, if we look at the last 3 months performance, we are seeing that the fund performance has shown significant improvement. And now the flexi cap fund is in the first quartile. And as we have mentioned earlier, we have also identified some of the funds which we are positioning for the blend strategy, which is you know neither the quality nor the value strategy. And there, two of our funds have shown very good performance, and they are now in the top half of the four quartiles. So they are in the first two quartiles. So there again we have you know, once the performance stabilizes over a longer period of time, we feel that all the flexi cap fund, as well as these funds, which are in the blend strategy, should be able to help us, you know, see progressively better inflows.
Vinay Lakhotia (UTI Asset Management Company Ltd): And to answer your second question with respect to the number of employees, I think few employees may be on the verge of joining in. But as far as our overall guidance number for the employee cost is, that we are maintaining that. It's for the standalone, it's close to around 95 crore per quarter, and for the consolidated, it's close to around 130 crore per quarter. We are maintaining with that guidance number for the full financial year as well.
Devesh Punjabi (Banyan Tree Advisors): Sure. Thank you.
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