UTI AMC shares fall 10%, the most since its listing; Here's why

Shares of UTI AMC Ltd. witnessed their biggest single-day fall since their listing in 2020, declining 10%,  after reporting its second quarter results.

The company's revenue declined 23% sequentially, which was broadly in-line with expectations, and driven by a sharp 91% decline in other (market-to-market) income.

The company's employee costs increased 23% sequentially, due to one-off items, dragging the earnings before interest taxes, depreciation and amortisation (EBITDA) margin lower by 1980 basis points sequentially.

The company's management said there is uncertainty regarding employee costs going forward. It expects the second half of the financial year 2026 to be better, on the back of product launches and better market sentiment. It has given a guidance of 7%-8% growth of other expenditure in comparison to the previous year.

Its profit after tax of ₹132 crore missed estimates on weaker margins and a drop in other income.

The company's quarterly average assets under management increased 5% from the previous quarter to ₹3.78 lakh crore. However, its market share declined across all key segments.

In September, the UTI AMC's SIP stoppage ratio increased to 76.27% from 74.51% in August. Other expenses were up as well, as a result of CSR expenditure.

In comparison to HDFC AMC

UTI AMC's equity AUM is steady at 26% of the AUM compared to 65% equity AUM of HDFC AMC. It is also much lower than the industry average of 56%.

UTI AMC reported a drop in average AUM market share for the second straight quarter, from 3.1% in the first quarter to 2.9% in the second quarter of FY26. Meanwhile, HDFC AMC reported a gain of 10 basis points to 12.9% during the same timeframe.

It reported the most drastic drop in other market-to-market income of 91% compared to a 59% drop for HDFC AMC.

The company's adjusted PAT yield is down to 17 basis points from 26 basis points — lowest among its peers compared to HDFC AMC's 30 basis points in the September quarter.

UTI AMC's PAT is adjusted one-off as a result of the voluntary retirement scheme (VRS) settlement in employee costs.

Shares of UTI AMC declined 9.9% to hit an intraday low of ₹1,263.3 apiece on Monday. The stock was down 5.9% at ₹1,318.5 apiece around 12.15 pm. It has gained 23.3% in the last six months.

With inputs from Devayani Vibhute

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