UTI AMC’s Core Income Misses Estimates by 20% Amid One-Time VRS Impact; FY26–FY28 Earnings Cut

UTI Asset Management Company (UTIAM) reported a weak quarter, with core income at Rs 1.33 billion, missing PLe estimates by 20%. The shortfall was largely driven by higher staff costs stemming from a Voluntary Retirement Scheme (VRS) impact of Rs 250 million. The VRS, effective October 1, 2025, aims to offer an exit route to 479 eligible employees, with an average payout between Rs 6.0–6.5 million. The entire VRS expense will be accounted for in the Q3FY26 profit and loss statement. Analysts noted that not all eligible employees may opt for the scheme, yet projected a 15% rise in staff costs and a 25% increase in overall operating expenses. Due to a mix of elevated employee costs in FY26 and lower AUM growth in FY27–FY28E, driven by weak equity market performance and declining market share, core PAT estimates for FY26/FY27/FY28E have been trimmed by 16.5%/3.7%/5.5%, respectively. UTI AMC is currently valued at 15x Sep’27 core EPS, reflecting a ~57% discount to Nippon Asset Management (NAM). #UTIAMC #MutualFunds #VRS #Q2Results #AssetManagement #EarningsUpdate #IndianMarkets #PAT #NAMIndia #EquityMarkets