Kimi Venkataraman and Sidd Thomas of India Intrinsic Value Consultants presented their investment thesis on UTI Asset Management Company (India: UTIAMC) at Asian Investing Summit 2025, held from April 8-11.
Thesis Summary
UTI Asset Management is one of India’s oldest and most respected names in investment management, with roots tracing back to its establishment by an act of Parliament in 1965. Today, the firm remains a top-ten player in the Indian asset management industry, with approximately $23 billion in assets under management and a 5.2% market share. Despite its legacy status and broad distribution footprint — 190 branches covering over 99% of Indian pin codes — UTI remains underappreciated in a market where mutual fund penetration is still in its infancy, with AUM-to-GDP sitting at just 15% compared to 140% in the U.S.
The company has a diversified business across mutual funds, pension mandates, and portfolio management services (PMS), with the latter accounting for 64% of AUM. Mutual fund assets, though smaller in absolute terms, benefit from a retail-heavy and largely direct distribution model, supported by a network of 55,000+ independent financial advisors. The company’s strong institutional backing — from State Bank of India, LIC, and two other public sector banks — gives it credibility and reach, particularly in India’s growing Tier 2 and Tier 3 cities.
UTI shares recently traded at ₹980, a P/E multiple of just 16x FY25 and a return on equity of 20%. In comparison, peers like HDFC AMC and Nippon Life command valuations of 27–32x earnings with ROEs in the 29–34% range. While UTI’s growth has been more modest — 5% annual revenue growth and 15% EPS CAGR over the last five years — the valuation discount appears excessive given the firm’s franchise value, brand recognition, and improving profitability metrics. The structural drivers of long-term AUM growth in India remain firmly in place, with the country still vastly underpenetrated by global standards.
Risks include potential market share erosion to more aggressive private sector competitors and sensitivity to short-term equity market sentiment. Nonetheless, UTI offers a compelling combination of heritage, scalability, and financial discipline, trading at a material discount to peers. With improving margins, strong distribution, and a tailwind from the formalization of savings in India, UTI represents a classic value opportunity in a structurally expanding industry.
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Slides
Let’s listen to the presentation and Q&A and look over the transcript.
