UTI Asset Management Company Limited (NSE: UTIAMC) Q4 2025 Earnings Call dated Apr. 30, 2025
Corporate Participants:
Unidentified Speaker
Imtaiyazur Rahman — Managing Director & Chief Executive Officer
Vinay Lakhotia — President & Chief Financial Officer
Sandeep Vivek Samsi — Executive Vice President – Head – Marketing, Corporate Communication & Investor Relations
Vetri Subramaniam — Chief Investment Officer
Surojit Saha — Group Financial Advisor
Analysts:
Unidentified Participant
Mohit Mangal — Analyst
Parth Agrawal — Analyst
Lalit Deo — Analyst
Freeganj Ujjain — Analyst
Dipanjan Ghosh — Analyst
Abhijit Khare — Analyst
Krunal Shah — Analyst
Vineet Nandwani — Analyst
Gaurav Jani — Analyst
Apurvi — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the UTI Asset Management Co. Ltd. Q4NFY25 earnings conference call. From the management we have with us today. Mr. Imtiazur Rehman, Managing Director and Chief Executive Officer Mr. Vinayakoutia, Chief Financial Officer and Corporate Head, Corporate Strategies Mr. Surujit Saha, Group Financial Advisor Mr. Vetri Subramaniam, Chief Investment Officer and Mr. Sandeep Sansi, Head, Investor Relations, Marketing and Corporate Communications. We also have investor relations teams from Headfactor PRs. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded. Before we begin, I would like to mention that some of the statements made in today’s conference call may be forward looking in nature and may involve risks and uncertainties. Please note the disclaimer mentioning these slides. These risks and uncertainties are are on the disclaimer slide of the investor presentation that has been shared earlier. I will now hand the conference over to Mr. Imtiaz U. Rehman for opening remarks.
Over to you sir.
Imtaiyazur Rahman — Managing Director & Chief Executive Officer
Thank you. A very good evening to all of you. It is my great honor and privilege to represent UTIMC as its Chief Executive Officer and I would like to welcome you as well. I would like to inform you that during this call we will apprise you about our financial and operational performance for fourth quarter and year ended March 31, 2025. I hope you have gone through the press release and investor presentation which are available on UTI AMC’s website. I have with me my distinguished colleagues and they are Mr. Vetri Subramaniam, Chief Investment Officer and the Chairman of the management committee of UTI AMC.
Mr. Vinayla Khotia, CEO of the company and head of strategy Mr. Surjit Sahar and Mr. Sandeep Samsi. I now hand over to Mr. Dhriti Subramaniam to talk about the macroeconomic view and industry related update. Vritti, over to you.
Vetri Subramaniam — Chief Investment Officer
Thank you. I’ll kick off with covering a little bit on the macroeconomics and then dive into the mutual fund industry and a brief update on UTI amc. India’s economic narrative continues to be a compelling one marked by a growth trajectory that has so far outpaced the majority of our emerging market peers. Despite geopolitical realignment, policy resets and economic shifts, India has remained quite resilient. The focus on macro prudential stability across fiscal and monetary policy domains means that India is well positioned to favorably navigate the stresses in the global economy. The Union budget for 2526 took a balanced approach by focusing on fiscal consolidation, moderate government borrowing and tax incentives.
A lower fiscal deficit of around 4.4% of GDP and controlled borrowing reflect prudent financial management, while tax relief measures aim to boost disposable income in the hand of households. These the MPC has reduced the repo rate by 50 basis points and accompanied by RBI’s monetary policy interventions in the market liquidity has improved significantly. The shift to an accommodative stance during the MPC meeting in April 2025 points to a determined effort to support economic growth in India. India’s direct exposure to current global trade tensions is relatively limited, but the interconnected nature of the world economy means that we must rem remain vigilant to broader shifts in global demand and potential indirect impacts.
The longer term implications of this reset of geopolitics and trade flow are still evolving. The large opportunity for India is to seize this moment to deregulate, cut red tape, attract FDI, and unleash animal spirits. Cost competitiveness and market size will remain key factors that drive investment decisions by businesses both in India and elsewhere in the world. India is blessed with attractive demographics, abundant labor supply and the status of being the world’s fifth largest economy. I’ll now move on to cover the developments in the mutual fund industry during the year and the quarter. With this macroeconomic context and amidst volatility in Indian stock markets, mutual funds continue to grow, fueled by expanding retail participation.
There has been robust growth of 32% in aggregate folio counts, reaching an impressive 23.5 crore where equity funds dominated with 16.5 crore and 1.6 crore in hybrid funds as compared to 17.7 crore folios in March 2024. This underscores the broadening investor appetite for diverse asset allocation strategies. For the month of March 2025, monthly SIP contributions grew by 34.5% year on year to 25,926 crore. For the full financial year, SIP assets have grown by 24.5% on a yearly basis, reaching nearly 13.35 lakh crore. By the end of March 2025, total assets under management witnessed a substantial leap of 23%, translating into total aum of rupees.
This growth was propelled by fresh inflows and favorable mark to market gains, highlighting the inherent dynamism of our business. However, the latter half of the fiscal year presented a nuanced picture marked by a market correction that has led to a discernible moderation in the flow of funds into mutual funds. While overall equity inflows hit a 11 month low in March 2025, as per AMSI, the industry marked its consecutive month of positive inflows in open ended equity schemes, underscoring the enduring confidence of retail investors. According to data from Amfi, these equity flows contracted 14.4% on a month on month basis in March setting at approximately Rs.
25,082 crores and this does suggest some impact from market volatility on investor behavior. This month followed a significant 26.2% month on month decline that was registered in February 2025, indicating, as I said earlier, growing investor caution amidst heightened market volatility. We anticipate that the regulatory push for retail investors by simplifying rules and introducing rupees 250 monthly SIP will further deepen equity market participation among a wide class investor and also across a wide range of towns and smaller habitations. And let’s move on to discuss some of the factors relating to UTI Asset Management Company At UTI AMC we recognize the powerful interplay of India’s demographic shifts, rising digital adoption and evolving investment behavior.
Our strategy is sharply focused on capitalizing on this transformation by expanding our presence across Tier 1 to Tier 4 cities, strengthening digital access through investor and partner platforms backed by our robust investment framework like ScoreAlpha and Gyms. We remain committed to nurturing a culture of disciplined investing even as the economy progresses towards the $5trillion milestone. In terms of GDP, the UBI Group’s total assets under management stood at Rupees 21.05 lakh crore as of March 31, 2025, reflecting a growth of 14% compared to 18.48 lakh crore at the end of the previous year. Mutual fund quarterly average lum was rupees 3.4 lakh crore as against 2.91 lakh crore last year.
We have added 9.52 lakh folios during the year to take the total count to 1.33 crore during the year. UTI AMC strategically expanded its reach across India targeting both the promising B30 and the established T30 cities. We further extended our physical presence into newer territory with a particular focus on tier 2 and tier 3 towns. Our established trend in beyond 30 cities remains a cornerstone, contributing nearly 22% to our monthly average AUM. This success stems from our sustained efforts in these regions to acquire new investors and cultivate enduring relationships. Demonstrating this commitment, we inaugurated 68 new branches in Tier 2 and Tier 3 cities in financial year 2025 and this physical expansion has been carried out with net zero cost addition to UTI ANC by rationalizing space, reallocating people and modifying branch organization, Struct technology played a vital role in our growth strategy enabling both the expansion of our investor base and enhancement of investor awareness.
We are the first mutual fund house in India to implement Salesforce marketing automation tool for investors and MFBs and this will enable us to send personalized communication and engage in direct conversations. At the same time, our digital platform UVI Heart has gained momentum offering seamless accessibility and enhanced functionality for both investors and distributors. Moving On Financial literacy and awareness campaigns were among the topmost priorities for uti. We conducted investor education campaigns across various platforms to reach as many investors as possible. On ground, campaigns were conducted in association with leading publications in remote corners of Madhya Pradesh, Chhattisgarh, Rajasthan and Gujarat.
More than 1,600 college students were engaged in a campaign called Project Fly Financial Literacy for Youth through interactive classroom sessions to foster financial awareness. With over 890 investor awareness programs, we reached out to more than 72,000 prospective investors including 291 programs for 12,000 plus women investors with our various interventions. Moving on FY 2025 has seen a turnaround in our equity performance. 59% of our equity AUM is in the top quartile over a one year period and performance is even stronger over the three month and six month period ended March 2025. Obviously these are still very short term periods as regards equity investment.
Product innovation remains central to our AUM growth Strategy. Amongst the NFOs we launched in FY 2025. UTI quant fund which opened in February 25 saw good fraction from our investors and partners alike. We also launched three Smart Beta, two Thematics and one Market Cap based Index fund, further augmenting our offering in passively managed space. Complementing our geographical and product expansion, we continue to strengthen our distribution network through dedicated training and workshops. Our fund management and product team have been actively engaging with distributors nationwide fostering stronger collaborations. I move on to talk about our global operations which are conducted through UTI International.
UTI International established presence in key markets including a new office that we have opened in New York is well placed to tap into the opportunities for international capital looking to be invested in India. We also progressed in upgrading our regulatory license in DIFC in Dubai to enhance our investment advisory capabilities in the Middle east we are very proud of our subsidiary Duty Pension Fund. This company crossed the milestone of 3.6 lakh crore AUM at this point of time we would like to announce that the competent authorities of PFRDA have transferred all schemes of Max Life Pension Fund management to to UTI Pension Fund.
Due to our strong fund performance, our efforts in private sector NPS have been very encouraging with a growth of 61% in AUM over the previous year. I’ll now talk about UTI Alternatives. Our first structured Debt Opportunities fund exited all investments profitably. Our investment operations in both Gibb City and and Rof1 have commenced and we are gradually attaining momentum in CO Investment portfolio management services. A broader word on all our subsidiaries. We would like to highlight that all our subsidiaries are well capitalized. They are aligned with our long term vision. We will continue to focus on launch of adequate products to offer a complete suite of investment solutions.
Expand to areas with marginal access to mutual funds across the country. Keep exploring and adopting best practices for a conducive work environment so that we can attract and retail the best talent. We wish to enhance our digital footprint and capabilities and we will look to further strengthen our governance and risk management practices. Through these multifaceted efforts, UDI AMC is strategically positioned to sustain its growth trajectory and deliver value to all our stakeholders during the year. Now I would like to hand over to Sandeep Sansi, Head of Marketing and Investor Relations to share our performance in detail.
Sandeep Vivek Samsi — Executive Vice President – Head – Marketing, Corporate Communication & Investor Relations
Thank you sir. I will begin with UPI AMC’s performance in the fourth quarter and for the financial year 2425. Starting with the mutual fund performance, the quarterly average AUM as of March 25 was rupees 3.4 lakh crores, a 16.8% growth year on year. Our market share of industry’s gross sales for the fourth quarter was 6.9% while for the full financial year it was 6.8%. Our equity quarterly average AM for March 2025 stood at Rs. 90,863 crores, rising by 7.18% as compared to the quarter ended March 24. Our quarterly average volume for the index and ETF funds stood at Rs.
1 41,492 crores, up by 23% in the fourth quarter. ETF and index fund net inflows stood at Rs. 19,605 crores. We have added 9.52 lakh folios during the year, taking up the number of live folios to 1.33 crore as on 31 March 2025, the net increase in folio numbers in the fourth quarter was around 1.89 lakhs. There has been a positive movement in equity and hybrid fund net sales for UTI during this year. We have moved from a negative of rupees 4230 crore of net sales for the last financial year, so positive net sales of rupees 1178 crore during this financial year.
Our SIP AEM witnessed a growth of 22.26% over the corresponding quarter of last year reaching Rs. 37,591 crore as of March 2025. The SIP inflows for the fourth quarter stood at Rs. 2,215 crores. The SIP gross inflows for UTM Mutual Fund witnessed a year on year growth of 24% with an average SIP ticket size being Rupees 3,239 for March 2025. For the full year SIP implodes where R 8,325 crores higher by 23% compared to Rupees 6,767 crores in FY24. The SIP solos in March 25 were 26.92 lakh, a 14% growth from March 24. Coming to the contribution from B30 cities, 22% of our monthly average AEM for March 25 came from the B 3,065.
For the industry the average stood at around 18%. UTIMC financials on a consolidated basis for the full financial year 2425 consolidated core revenue from operations was rupees 1445 crore up by 22% year on year. The core profit after tax for FY2425 was rupees 492 crore up by 43% year on year and overall consolidated net profit was rupees 731 crore down by 5% year on year. During the fourth quarter the consolidated core revenue from operations stood at Rs. 360 crore up by 13% year on year. The core profit after tax for the fourth quarter was 98 crore, higher by 2% year on year on a standalone basis for the full year FY 2425, the standalone core revenue from operations was rupees 1,180 crores, up by 24% year on year.
The core profit after tax for FY2425 was rupees 447 crore, up by 52% year on year. The overall standalone net profit was rupees 653 crores up by 9% year on year during the fourth quarter, the standalone core revenue from operations stood at Rs. 296 crore, up by 15% year on year. The core profit after tax for the fourth quarter was rupees 108 crore, higher by 20% year on year on the digital assets in the financial year 2025 as the Vetri shared, we have partnered with Salesforce and gone live with their marketing automation tool to send customized communication to our investors.
We are the first mutual fund in India to adopt Salesforce. 47.87% of our gross sales of equity and hybrid funds were mobilized through the digital platform during the quarter 4 of FY25. After the complete revamp of our website and mobile app in FY24, we benchmarked our digital assets with the industry and have made relevant upgradations to foster seamless experience to investors and partners. Diversity, equity and inclusion initiatives are at the highest priority in UTI and there is a continuous focus on building inclusive hiring practices and promoting gender diversity in leadership roles. A lot of impetus has been put on learning and development for the employees as well as for the well being.
Many training and intervention across behavioral, functional and leadership domains have been imparted over the years. Support is being extended to the leadership team by way of structured coaching for strategic impact on sales and distribution. To augment our distribution network we conducted an empanelment drive which helped us in extending our MFD network with around 8,500 new partners in FY25. Our grow yard Fund House engagement activities were executed with Pan India MFG while many webinars were also conducted to upskill our partners coming to our group companies. In addition to the highlight shared by Vectri on UPF Pension Fund earlier, we would like to share that UK PSL has recorded a growth of 19% year on year in its stadium reaching approximately Rupees 3.59 lakh crores as of March 25and currently manages 24.86% of the NPS industry’s amount.
The profit after tax of UPSL for FY25 is at rupees 57 crores an increase of 5% year on year. UKSL is now fully operational from 21 locations across the country. The management of funds under the default pattern of Unified Pension Scheme UPS and the Unified Pension Scheme Pool corpus has been entrusted to UPI Pension Fund Limited along with two other fund managers Pension Fund Managers by PFID on UTI International. UTI International, which represents our international business, has an AUM of rupees 25,383 crore as of March 25th. One of our flagship fund, India Dynamic Equity Fund IDF domiciled in Ireland has an AEM of 805 million.
The ESG compliant J Saprasarasan Responsible India Fund has an AEM of 65.4 million. UKI India Innovation Fund, another Ireland Unified Fund, has an AEM of 47 million on UTI Alternatives Limited. UTA Alternatives Private Limited had a total year of Rs. 2,648 crore as of March 25th, a 34% growth from March 24th. It has a very defined EIG policy and strategy and is committed to responsible investing. The UPI NDOC 1 has exited all investment profitably while UKDOC 2 has a final close in May 2022 and has a net commitment of Rupees 239 crores and is currently in exit mode.
The UTI SDOC 3 has a net commitment of Rupees 615 crores. Currently it is in fundraising and investing stage. UTM Multi Opportunities Fund 1 is currently in investing stage and has net commitment of rupees 1599 crores. The UTI Real Estate Opportunities Fund 1 is currently fundraising and investing with a commitment of rupees 145 crores. The UTI Credit Opportunities Fund 1 and UTI Asset Reconstruction Opportunities Fund are in investing stage. Three of the funds have received approval of IFSC under the UAPL Branch Office FME approval and we have commenced operations with US dollar 200 million commitment.
I would now request the Managing Director for his concluding remarks.
Imtaiyazur Rahman — Managing Director & Chief Executive Officer
Thank you Sandeep for sharing the operational and financial updates of the company for the fourth quarter and financial 2025. I am also extremely pleased to inform you that UJIMC has declared a dividend of rupees 48 per share in 2022 rupees as a special dividend for the financial year 2425. This is almost 94% of the standalone profit of the company which is at Rs.653 crore. We would like to open the forum for questions and answers. Thank you very much.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone touch. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we’ll wait for a moment While the question queue assembles. We. Have our first question from the line of Mohit Mangal from Centrum Broking. Please go ahead.
Mohit Mangal
Yeah, thanks for the opportunity. So my first question is in terms of net flows, I think we had a very good quarter with around 15 odd billion of net flows, you know, but having said that, I think majority of them came from the quant fund that we launched in the quarter. So can you explain your strategy that if you would launch new NFOs in financial year 26.
Sandeep Vivek Samsi
So Mohit, we have recently got a regulatory approval to launch a multicap fund and that the fund is already open for subscription from 29th of April till 13th of May. Apart from Multi Cap fund, we don’t see any pipeline as far as the diversified equity is concerned. There will be some launches on the ETF and the index fund depending on the appetite. But apart from that on the diversified equity fund, we don’t foresee any NFL launches.
Mohit Mangal
All right, our next question was the taxes. So we saw a very high tax rate in Q4. What was the reason for that
Sandeep Vivek Samsi
Q4? I think overall tax rate, if you compare it is because of the change in the deferred tax liability on account of that budgetary approval regulation change where the indexation benefit was not withdrawn. So because of that the taxation rate has increased but almost around that it said impacted by almost around 2.3%.
Mohit Mangal
Okay. But going forward it would be, I mean from 26 onward it will be normal tax.
Sandeep Vivek Samsi
Yeah. On a, on the book rate we see in the range of around 23 to 24%.
Mohit Mangal
23 to 24%. Okay. Lastly in terms of yield, you know, how should we see that going forward? And if you could, you know, spell the equity for the yield for the equity debt and liquid for the quarter.
Sandeep Vivek Samsi
So as far as the book yield is concerned, Equity and hybrid fund, our book yield is close to around 75 basis points. Equity and index fund is around 5 to 6 basis points, cash around 9 to 10 and income fund for around 22 to 23 basis points. So the weighted average yield is around 34 basis points. Going forward we expect maybe a dilution of max to max one or two basis point in yield mainly because of the higher proportion of ETF AUM that we have. And we continue to receive the very high inflows on the ETF and the index fund.
Because of that there might be a equity dilution of around one to two basis points.
Mohit Mangal
Understood. Thanks and wish you all the best.
Sandeep Vivek Samsi
Thank you.
operator
Thank you. We have our next question from the line of part Agarwal from Bastion Research. Please go ahead.
Parth Agrawal
Hi, thank you for the opportunity. I have a question regarding the OPEX cost which has increased significantly this quarter. Is it attributed to only NFOS or is there any other reason?
Sandeep Vivek Samsi
It’s not actually NFO. Just to highlight that over the last 15 months we have opened more than 91 branches. Some of those branches were opened in the previous quarter. So some of those renovations expenses to open those offices have come into this quarter. But on an aggregate basis, if you see in spite of opening of 91 branches over the full financial year on a year on year basis, the overall other expenses have increased by just around 6%. So we have been able to rationalize the cost on many other aspects. And in spite of the number of branches increasing from 164 to 255 as on 31 March, the operating expenses are well under control.
Parth Agrawal
So can I expect this 90 crores. Of run rates to continue in FY26 as well in subsequent quarters? Is there a possibility of it getting normalized?
Sandeep Vivek Samsi
No, I think 7 to 8% and inflation increase on these numbers.
Parth Agrawal
You can assume These number means FY25 numbers or quarters for FY25 numbers.
Sandeep Vivek Samsi
No, the overall FY25 number.
Parth Agrawal
Okay, thank you so much.
operator
Thank you. We have our next question from the line of Lalit Dev from Equator Security. Please go ahead.
Lalit Deo
Yeah. Hi sir. Good evening. On the international side, so we have seen some decline in the A side of it. So is it majorly on account of the MGM losses and how should we look ahead for FY26 and FY27 and the international business?
Sandeep Vivek Samsi
So the major decline. Yes, both on a quarter on quarter basis as well as on a year on year basis has been a mark to market impact in two of our main fund, UTI Innovation Fund and UTI Dynamic Equity Fund. With respect to the outlook, I think you may take a follow.
Vetri Subramaniam
I think we are continuing to see good engagement from institutional investors showing interest in India. So hard to give any guidance on exactly what the numbers will be. But I think we are quite encouraged by the trend of conversation we are having with global investors who are looking for investment products which can allow them to participate in Indian equity markets.
Lalit Deo
Sure, sir. And so on the employee side, so we have seen some additions in the employees in this. In this particular quarter and also the employee expenses like on the standalone side, we have seen some decline for this whole FY25 on an annual basis. So how should one read into it for FY26 in terms of cost as well as new headcount additions.
Sandeep Vivek Samsi
So the guidance that we have given in an earlier call as well, at least for the standalone entity for FY25 26, we don’t foresee our employee cost rising more than 300 basis points for FY25 number in spite of annual wage hike of 7 to 8% in this particular year on a standalone. On a consolidated basis this number could be around 150 to 200 basis point more. Primarily because we are investing heavily in all the three subsidiaries. UTI International as Sandeep rightly pointed out, we have extended our presence in Europe as well as usa. So there might be some additional headcount recruitment over there.
UTI Pension Fund we are expanding our POP business there. Also, the headcount of employees in the financial year 2425 has increased by almost around 40 and we expect a similar run rate to continue. So on a console level, the employee cost on FY24 25 number could increase around 400 to 500 basis point. But on a standalone we believe that it should be in the range of around 250 to 300 basis point. And this projection number does not include any additional ESOP which may be granted by NRC in this particular financial year.
operator
Thank you. We have our next question from the line of Freyjain from Modilal Oswal. Please go ahead.
Freeganj Ujjain
Yeah, hi. Hi. Good evening everyone. Just a couple of questions. Firstly on the our fund performance, since you have improved in the last few months, when do you think we should start seeing some improvement in market share on the equity side on a quarterly basis they still have seen a decline in market shares or is this about steady market share? So when do we see an improvement in market share on equity plus hybrid?
Vetri Subramaniam
Yeah, hi, this is Datri here. It’s a good question. As I said earlier, for the full year almost 59% of the equity hybrid AVM is in quartile 1, quartile 2. And when you look at it sequentially it sort of keeps improving as you get closer to the end of the year. In our experience, normally you need at least a 12 month strong number to start turning the corner, which I think we saw in the last two quarters. We started to see that inflection point and the strongest numbers typically show up 18 months, 24 months into the cycle.
Because remember, for many people, including gatekeepers who approve products, typically the three year number of performance is what actually plays a very critical role in their filtering. Not each and every individual, but many of the platforms Many of the gatekeepers that distributors typically tend to look at three years. So we would expect that during the course of this year we’ll certainly be well into the 18th month, 24th month period. There should be a significant improvement in those numbers and anecdotally we already know that some of the products have received new approvals at different, you know, national and banking partners.
So all of that will contribute, we hope, to a gain in market share during the course of this year.
Freeganj Ujjain
Any indications on your existing Shemes Apart from NFOs, what has been the flow trajectory, whether it’s been positive and what would be a flow market share?
Sandeep Vivek Samsi
So Sandeep, we have seen good traction on our hybrid funds also and that is reflected in the net sales that we have seen in our hybrid funds. So that is one positive which is there beyond the sales which are coming in our etc nfos. Also our large and mid cap has seen good traction in the last financial year. So these are some of the funds which have done well for us in the last year.
Vetri Subramaniam
And just to add to here again for a while now our focus has been largely on trying to get investors to look at the hybrid solution for a variety of reasons. Our view on valuations, our view on the best way to navigate volatility and also sort of make the investor journey smoother. So that’s been a big focus and I would say significant part of the traction we have seen so in turning around flows during the course of this year has actually come from the hybrid fund.
Freeganj Ujjain
Generally with fund performance you need to have your sales force on the ground really gaining traction and initiatives by the company should be. So any new initiatives on the sales front that you guys will be taking to capitalize on this improvement in performance?
Sandeep Vivek Samsi
No. See so far as the sales is. Concerned, as Vinay mentioned, we have opened large number of offices. Our interactions with all kinds of distributions like bank as a distributor or nation distributor or NFD is a very intense conversation we are having. And we have seen the inflow in the previous year, financial year in almost all our equity schemes. So backed by the very good performance, our track record, consistency in the team and very able now sales team on the ground with our great relationship we are quite confident that going forward our sales number will be quite better.
Freeganj Ujjain
Just a clarification on the employee cost front what you mentioned was the standalone employee cost will go up by 3% YoY and consolidation it would go by 5%. Is that the right. Okay. Thank you so much. Thank you so much.
operator
Thank you. We have our next question from the line of Dipanjan Ghosh from Citigroup. Please go ahead.
Dipanjan Ghosh
Good evening. Just a few questions from my side. First, on the fit flow number, you know, just for you guys, can you just kind of split it between different channels or a ballpark qualitative understanding of that. And second, on these lines, you know when the market has seen some marginal dip in the SIP number, be it in terms of gross flows or new registration, how has seen the trend for you across channel partnerships or customer cohorts? If you can give some color on that. And the second question, you know when I look at, and this is also a quarter but annually when I look at your RTA payouts they are significantly higher than what I look at it for years and I just wanted to understand is there some other additional work that RTAs are doing for you and can there be some headroom on that part over the next two or three.
Sandeep Vivek Samsi
Years the RTA play out your thing on the AMC financials or.
Dipanjan Ghosh
On the AMC Financials. Hello. On the team Financial. Basically when I do the bottom of.
Sandeep Vivek Samsi
The scheme accounts, scheme financials, I think all these rates are pretty much standardized across industry players. So whatever dissection you do across categories, I think we are pretty much much in line with the industry pair.
Dipanjan Ghosh
Okay, maybe I’ll take the top and okay.
Vinay Lakhotia
On the, on the SIP flows we have seen marginal but continuous increase in our monthly SIP inflows throughout the financial year 25. Our SIP gross sales and folio count on a year on year basis are also grown by around 23% and 14% respectively. So we still have some comfort level there. Our focus right now is on the on ground activation for education around the long term investment in sip. If you look at the share by the channel, the highest share in SIP flows was from the MFP channel which is about 51% followed by direct and RI channel which are in the range of 15 to 20%.
If we look at the four quarters, the contribution of the direct channel to SIP flows remained at around 17 to 18% and in absolute number there has been a continuous increase year on quarter, on quarter basis. We have similar trends in other channels. So for up there hasn’t been really a slowdown in the SIP numbers.
Dipanjan Ghosh
Got it sir. Thank you. And all the best.
Surojit Saha
Thank you.
Vinay Lakhotia
Thank you.
operator
Thank you. We have our next question from the line of Abhijit Sakare from Kotak Securities. Please go ahead.
Abhijit Khare
Hi, good evening. I have couple of data questions. So when I look at the UPI international financials there is a sharp drop in investment and other income line from 112 crores to 31 crores. So wanted to understand if all of this is due to the mark to market impact only. And this is in context of, you know the, the breakup of your own investments. Right. When I look at that number it’s close to about 600 crores. So in that context that decline in investment and other income seems to be a pretty sharp drop. So some clarification there please.
Sandeep Vivek Samsi
Yeah. So out of the 600 crore only 450 crore is actually invested into equity fund majorly into UDI Innovation Fund and Dynamic Investment Equity Fund. And 115 crore is actually a sovereign ETF fund. So you don’t have any mark to market issue as far as the ETF is concerned. But both on innovation fund and dynamic equity fund you need to appreciate that apart from the market impact there is also a currency impact. So currency has fallen sharply over the last year and so and especially in the last quarter. So it’s actually a dual impact of market depreciation as well as the currency impact.
So the entire impact in the investment income is primarily because of mark to market impact in UTI Innovation Fund, Dynamic Fund and UTI Talent Fund which are which we the company has invested as a seed capital investment into these funds.
Abhijit Khare
And second again on the international business, is it possible to share what is the staff count just for this entity.
Sandeep Vivek Samsi
On a standalone on a year on year or quarterly.
Abhijit Khare
The number of people in the international business, number of employees. Okay, got it. And sir, just last one on the yields you mentioned it’s about 75 basis points. But now given that we are expecting flows to recover going ahead, do you expect any drop in realizations in the equity side?
Sandeep Vivek Samsi
Yeah, some dilution could happen but we have already we have also rationalized some of the distributor commissions, older equity which has which have been impacted our margin over the last four to five years and market are correct. So that rationalization we have already carried out, we believe that that rationalization will cushion some of the decline in the yield that may happen because of fresh inflows under equity and hybrid fund.
Abhijit Khare
Got that. And again on this point sir, is it possible to quantify what would be the amount of savings because of the commission cuts and are they already fully reflected in the numbers?
Sandeep Vivek Samsi
No, these are not reflected. They have implemented from this particular quarter. This will be visible in the next quarter in earning difficult to quantify. But the only guidance that we want to provide is that this will provide some cushion in equity yield dilution going forward.
Abhijit Khare
Got it this is very helpful, sir. Thank you so much.
Sandeep Vivek Samsi
Thank you.
operator
Thank you. We have our next question from the line of Kunal Shah from Enum Investments. Please go ahead. Hello.
Krunal Shah
Yeah, thank you for the opportunity. So my first question is regarding the UPI retirement UTI International business. So if I see the operating expense of these two businesses, it has gone from 135 crore in FY22 to around 221 crores in FY25. So that’s a sharp jump. Simultaneously the revenue has not increased too much. So that’s one point I want to understand is where will this cost stabilize and what is the kind of return that we’re expecting from these costs that we’re incurring.
Sandeep Vivek Samsi
So I’ll take these two questions separately. On UTI International, some of these operating expenses have increased because of our branch expansion in Europe and USA where there have been a one time establishment cost as well including the very high compliance cost. So those expenses are already being factored into. We believe that for 25, 26 we should grow at the similar run rate only in terms of monetizing winding expenses will actually result in a revenue. I think we are already in discussion with few of the partners and when the fresh inflows come the investment will actually.
Just with respect to UTI pension, I think you need to understand that the three basis points that we are earning from PFRDA 1.5 basis point is paid back to PFRDA as marketing activities. So this one and a half basis point that we are paying back to PFRDA is actually coming as an other expenses. And these expenses keep on increasing in line with the area of demand. So since UTI International has seen almost around 18 to 20% increase in the EU that has resulted into increase in other expenses. Also we are expanding our geographical presence for UTI pension fund.
We have already opened 41 branches which are part of UTI branches only because of that at a UTI pension level, some of these OPEX could forecast on a slightly higher side. But this particular business generates revenue. As you can see almost around 55 to 56 crore of profit is being contributed by this particular entity at a consolidated level. I hope I answered the question.
Krunal Shah
Yes, to some extent. Yes. So just one point on UTR retirement. So our our share of the business in terms of the AUM has gone down from like 25.8 to 25. But my understanding was that we were supposed to get a fixed amount every time from PFRDA in terms of AUM flow. So why is our Share has declined in that case.
Imtaiyazur Rahman
So there are two type of. I mean two type of allocation comes. One is for the public sector employees. Another which we go and market from the private sector. From the public sector. This generally is defined in the beginning of the year for the full year. But so far the market discussion it depend upon our marketing and the sales capability.
Krunal Shah
Okay, so this is. Sir, in relation to the private sector wherein we have not had the same share as in the government. Is that understanding correctly?
Imtaiyazur Rahman
Yeah. Yeah, you’re right.
Krunal Shah
Okay. Okay. And one last question. So we incurred a capex of around 50 crores in FY26. Could you just help me understand on what expenses this capex was incurred?
Sandeep Vivek Samsi
Major part is out of that. Since we have highlighted earlier we have opened 91 branches over the last 15 months. Major part of these capex are relating to those offices. Plus we have in FY24 end we have upgraded our IT infrastructure as well. So there are some capex costs relating to IT infrastructure as well.
Krunal Shah
Okay, so from next year onward will this cost go down significantly? Now the capex amount.
Sandeep Vivek Samsi
Yeah, the capex amount should go down. I don’t think we will be opening such high number of offices in FY 25 26. But on the pension fund. Yes, they are my. Since they are expanding their pop business there might be some capex load on the retirement pension fund business.
Krunal Shah
Okay, thank you so much. Thank you.
Sandeep Vivek Samsi
Thank you.
operator
Thank you. We have our next question from the line of Vinit Nanwani from NJ India Investments. Please go ahead.
Vineet Nandwani
Yeah. Hi sir, I just had two questions. So first one is that can you elaborate on the net gain on fair value changes? So like weren’t there M2M gains on. The debt investments in this quarter?
Sandeep Vivek Samsi
So this quarter the major impact in M2M investment is actually coming from UTI International where we have a mark to market impact of close to around 65 crore. As I highlighted earlier mainly in two of our funds UTI Innovation Fund and UTI Dynamic Fund. On the AMC balance sheet I think the impact is just around around 2 crore. But at a console level the major impact is actually coming from India International.
Vineet Nandwani
Okay, sir. And sir, just for Q4FY25, can you. Help me understand how is the core. Pad being calculated from the pack attribute attributable to the owners of the company?
Sandeep Vivek Samsi
The core pad is your management fees minus the total expenses. It does not include your investment income.
Vineet Nandwani
Okay, sir. Thank you.
Vetri Subramaniam
Thank you.
operator
Thank you. We have our next question from the line of Gaurav Jani from Prabhudas e Gadar, please go ahead.
Gaurav Jani
Yeah, thank you. The first question on performance. Right. I just want to understand as to how do you plan to sort of sustain the strong performance over a longer period of time, given the fact that historically we have seen some larger AMC with episodes of strong performance followed by some deterioration. So that’s the first question.
Vetri Subramaniam
Sure. So Vetri here, I’ll reply to that. So, you know, one of the things that we’ve been conscious about for a while now, I would say is that while we run with one investment process on the equity side, we run schemes which are actually quite different from each other in terms of their positioning. And when I said positioning, not just the sedigit, but literally from a style perspective in terms of their positioning. And one of the reasons why we do that is to be able to always, at any point of time, irrespective of what the market season or market cycle is, you have differentiated strategies which for investors who are looking at what’s doing well in terms of the table, wherever the choice of looking at fund ratings are, there is always some UTI product which is appearing over there.
So our thought process over there is to always segment the market in terms of things whatever be the cycle of the market. These are the strategies which could be aligned with what is doing well in the market, which could be products you would wish to look at, but from a communication aspect. What we also do is based on our fund management view, have a clearly articulated go to market strategy which positions the funds which are backed by performance at that point of time and simultaneously talk about the funds where we think the cycle might turn favorable in the future.
Because what we’ve seen over a period of time is that as the market gets more evolved, we are seeing distribution partners, advisory partners approach the business very differently. One, they want funds which will run strictly as per the mandate. So once they understand the positioning, they understand the cyclicality, but they also want guidance from us in terms of where we think funds with current weak performance could turn around. So this is part of our template now of saying how do we sort of de risk the business model? De risk it by having diverse strategies and talk the language of performance and opportunity in the marketplace at all points of time.
Gaurav Jani
Understood, thank you, sir, that helps. The second question is to just clarification. So you mentioned equity yields could sort of contract by about one to two basic funds in the next year, right?
Vetri Subramaniam
No, I said overall yield of 34 basis point that might contract because of the growth in the ETF and the index business.
Gaurav Jani
Okay. So you mentioned the overall yields and not specifically equity.
Vetri Subramaniam
Yeah.
Gaurav Jani
Okay, thank you. That’s it from now.
operator
Thank you. We have our next question from the line of APOORVI from. We have a last question from the line of APURVI from Whitestone Advisors. Please go ahead.
Apurvi
Yes. Hi, sir. Thanks for the opportunity. So my only question is regarding the. Reason for Q4 to be weak as compared to Q3 other than the M2M thing. Right.
Vetri Subramaniam
Q4 versus Q3, any seasonality?
Apurvi
No, no. I don’t think that even the operating income has actually held up apart from mark to market depreciation. There have been no impact as such. Okay, thank you.
operator
Thank you. This was the last question for today and I now hand the conference over to Mr. Rehman for closing comments. Over to you, sir.
Imtaiyazur Rahman
Thank you very much and thanks. I would like to thank all of you for your participation. Thank you.
operator
Thank you, ladies and gentlemen. Thank you for joining the call. In case of any queries, feel free to connect with Ed Factors investor relations team. You may now disconnect your lines.