UTI AMC announced its unaudited financial results for the quarter and nine months ended December 31, 2025, showing mixed performance with strong revenue growth offset by exceptional charges. The asset management company's Board of Directors approved the results at a meeting held on January 21, 2026.

Financial Performance Overview

The company's standalone financial performance for Q3FY26 demonstrated robust operational growth despite facing significant one-time expenses. Revenue from operations increased substantially, driven by improved performance across multiple income streams.

Revenue Composition and Growth Drivers

The company's revenue streams showed varied performance during the quarter. Sale of services, which forms the largest component, grew to ₹322.27 crore from ₹306.59 crore in Q3FY25. Net gain on fair value changes surged dramatically to ₹88.74 crore compared to ₹10.35 crore in the previous year quarter.

Exceptional Items Impact

The quarter's results were significantly affected by exceptional items totaling ₹108.49 crore. The company introduced a Voluntary Retirement Scheme during the quarter ended September 30, 2025, with applications accepted until October 31, 2025. During Q3FY26, 184 employees opted for VRS, resulting in a provision of ₹84.64 crore. Additional costs included gratuity expenses of ₹2.89 crore for early settlement and pension liability of ₹16.75 crore.

Furthermore, the implementation of New Labour Codes effective November 21, 2025, led to an incremental gratuity liability of ₹4.21 crore due to revised wage definitions under the new regulations.

Nine-Month Performance

For the nine months ended December 31, 2025, the company maintained strong operational performance. Total revenue from operations reached ₹1,250.23 crore compared to ₹1,132.33 crore in the corresponding period of FY25, representing a growth of 10.41%. Net profit for the nine-month period stood at ₹506.03 crore, slightly lower than ₹529.50 crore in the previous year.

Earnings Per Share and Capital Structure

Basic earnings per share for Q3FY26 was ₹9.64 compared to ₹11.17 in Q3FY25. For the nine-month period, basic EPS stood at ₹39.49 versus ₹41.56 in the previous year. The company allotted 2,81,133 equity shares during the quarter and 5,40,132 equity shares during the nine-month period pursuant to stock option exercises.

Consolidated Results

On a consolidated basis, the company reported net profit attributable to owners of ₹120.97 crore for Q3FY26 compared to ₹150.69 crore in Q3FY25. Consolidated revenue from operations increased to ₹517.13 crore from ₹417.58 crore, showing growth of 23.83%. The consolidated results include performance of subsidiaries including UTI International Limited, UTI Pension Fund Limited, and other group entities.

Indian equity markets face a valuation challenge that could keep them range-bound in the near term, according to UTI AMC 's Head of Equities, Ajay Tyagi. Despite strong domestic flows, policy support, and earnings recovery expectations, current market pricing reflects much of this optimism, creating limited room for significant re-rating.

Current Valuation Landscape

Tyagi highlighted that Indian markets have been trading at a premium to their long-term valuation averages since 2024. Even after nearly a year and a half of consolidation since the August 2024 peak, the valuation premium persists across market segments.

Earnings Growth Disconnect

The valuation concern stems from a significant disconnect between market expectations and actual earnings delivery. Tyagi pointed out that while India typically witnesses corporate earnings growth aligned with nominal GDP at around 12.00%, recent performance has fallen short of this benchmark.

This earnings underperformance occurred while markets had already priced in stronger growth, resulting in elevated valuations as prices remained high despite lagging fundamentals.

Forward Outlook and Policy Support

Looking ahead, consensus expectations are building in a sharp recovery for FY27 earnings, estimating nearly 16.00% growth over FY26. Policy changes including income tax relief and GST rationalization are expected to support consumption patterns. However, Tyagi cautioned that markets are not cheap even after accounting for these positive developments, as the forward earnings optimism is already factored into current pricing.

Sectoral Value Opportunities

Despite the overall valuation concerns, Tyagi identified specific sectors offering relatively better value propositions based on current pricing metrics.

Private Sector Banks

Private sector banks emerge as one of the few pockets trading at a discount to their long-term valuation averages. Despite demonstrating:

• Better underwriting quality than PSU peers
• Stronger balance sheet positions
• Superior operational metrics

These banks have underperformed the broader market rally, leading to comparatively reasonable pricing opportunities.

Information Technology Sector

The IT sector presents another attractive opportunity where valuations have cooled to near long-term averages after a challenging period. Tyagi noted that fears around AI disruption appear overplayed, creating scope for mean reversion as earnings stabilize and the sector adapts to technological changes.

Auto Original Equipment Manufacturers

Auto OEMs appear better positioned on valuation metrics despite their operational strengths. These companies have delivered:

• Stronger returns over time
• Healthier balance sheet positions
• Consistent operational performance

Yet they continue trading at lower multiples than ancillaries, creating a valuation gap that Tyagi finds difficult to justify based on fundamentals.

Investment Strategy Implications

Tyagi's assessment suggests that while Indian markets are not cheap and optimism is largely priced in, select pockets like private banks, IT, and auto OEMs offer relatively better value. He expects broad indices to consolidate further, making stock picking guided by realistic valuation expectations a key strategy for navigating the current market environment.

The combination of elevated overall market valuations and sector-specific opportunities creates a mixed landscape where selective investing based on individual company fundamentals and sector valuations becomes crucial for potential outperformance.

Source: https://www.etnownews.com/markets/exclusive-market-valuations-high-ajay-tyagi-of-uti-amc-lists-top-sectoral-bets-article-153420090