UTI AMC hits new high ahead of results, rallies 111% from October lows

The stock hit a new high of Rs 994, up 79 per cent from its initial public offer issue price of Rs 554 per share

Shares of UTI Asset Management Company (AMC) hit a new high of Rs 994 as they rallied 8 per cent on the BSE in intra-day trade on Wednesday, in an otherwise weak market, on expectations of good earnings.

The stock of the AMC surpassed its previous high of Rs 947.20 touched on July 23, 2021. It traded at its highest level since its stock market debut on October 12, 2020. In comparison, the S&P BSE was down 0.67 per cent at 52,226 points at 09:52 am.

In the past one week, the stock has outperformed the market by surging nearly 15 per cent compared with a flat performance by the benchmark index. Following the recent run-up, the market price of the company has more than doubled or risen 111 per cent from its 52-week low of Rs 471 touched on October 12, 2020. The stock has appreciated by 79 per cent from its initial public offer issue price of Rs 554 per share.

In the past three months, UTI AMC has gained 63 per cent after the company reported a return to profit during the quarter ended March 2021 (Q4FY21) by posting a consolidated net profit of Rs 133.62 crore. It had posted a loss of Rs 27.58 crore in the corresponding period a year ago.

The revenue from operations for Q4FY21 came in at Rs 289.24 crore, up 112 per cent compared with Rs 136.32 crore posted in the year-ago quarter. SIP AUM had increased by Rs 5,930 crore or 75.4 per cent from Rs 7,861 crore as of March 31, 2020 to Rs 13,791 crore as of March 31, 2021.

"UTI AMC has registered an increase in its assets under management in this challenging environment and will continue to strive for growing its business in future. The mega vaccination drive across the country is a positive development which can help in the economic recovery," the management had said.

UTI AMC is exhibiting multiple positive business indicators such as gains in market share in equity segment as well as flows, SIP as well as folio additions. Cost reduction program undertaken by the company and hike in pension fund management charges are strong earnings drivers ahead, brokerage ICICI Securities said in March quarter result update, adding that these growth levers, along with attractive valuations, make us constructive on UTI.

UTI AMC is a professionally managed company with no identifiable promoters. T. Rowe Price International – a global investment management firm is its largest shareholder. State Bank of India, Bank of Baroda and Life Insurance Corporation of India divested their stake to below 10 per cent and now hold no special rights. Punjab National Bank, which has no other AMC business, has a 15.24 per cent holding.