UTI Asset Management Company Limited ($UTIAMC)

Ladies and gentlemen, good day, and welcome to the UTI Asset Management Company Limited Q4 and FY '26 Earnings Conference Call. From the management, we have with us Mr. Vetri Subramaniam, Managing Director and Chief Executive Officer; Mr. Vinay Lakhotia, Chief Financial Officer and Head corporate strategy; and Mr. Sandeep Samsi, Head, Investor Relations, Marketing and Corporate Communications. We also have Investor Relations team from Adfactors PR. [Operator Instructions] and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] 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 discussion may be forward-looking in nature and may involve risks and uncertainties. Please note the disclaimer mentioning these risks and uncertainties are on the disclaimer slide of the investor presentation that has been shared earlier. I will now hand over the conference to Mr. Vetri Subramaniam for opening remarks. Thank you, and over to you, sir. .

Good evening, everyone. Thank you for joining us today on this call. our financial results presentation and press releases have been shared on the stock exchanges as well as on our website, and we trust you have had the opportunity to review them. Today, I am joined by my colleague, Vinay Lakhotia, CFO and Head of Strategy; and Mr. Sandeep Samsi, Head of Investor Relations, Marketing and Corporate Communications. Before I take this opportunity to provide you with a brief perspective on the market scenario, our performance and our way forward. I would like to take a moment to thank UTI shareholders, Board and trustees for the confidence and trust they have reposed in me in continuing to build UTI's legacy. Having been closely associated with this organization for nearly a decade, I believe we have built a strong foundation across our investment capabilities, distribution and technology. Our focus now is to accelerate growth from this base improve our growth and continue delivering long-term value to all the stakeholders. Let me begin with a brief overview of the macroeconomic environment and industry trends. The year FY '25, '26 has been a year of resilience in investor behavior even as markets have witnessed volatility. The key differentiator has not been the short-term movement in floors, but the enduring structural stability in investor behavior towards financial assets and, of course, particularly mutual funds. Despite global uncertainties, whether in geopolitical developments, trade shifts or capital flows, India's fundamental growth drivers have remained intact. Domestic demand continues to be strong, and the financialization of savings is clearly sustaining momentum. We have been seeing this clearly in the growth in systematic investment plan investments. Talking now about equities and mutual funds, in particular. On the industry trends, FY '25, '26 continue to witness strong retail investor participation. Total mutual fund portfolios at approximately INR 27.39 crores as of March 2026. Retail mutual fund portfolios, equity plus hybrid and solution-oriented schemes increased to around INR 20.82 crores. The industry's average assets under management reached INR 79.46 lakh crores as of March 2026, demonstrating steady expansion driven by both market performance and sustained inflows. Retail AUM stood at INR 42.89 lakh crores and this underlines the growing contribution of individual investors to the overall mutual fund industry. SIPs continue to be a key driver of flows and investor discipline. The monthly SIP contribution stood at INR 32,087 crores in March 2026, while SIP AUM reached nearly INR 15 lakh crores, accounting for 19.94% of overall MF industry AUM. While there has been some moderation in inflows across certain categories in recent months, Investor participation remains broad-based. Industry Equity mutual fund inflows stood at INR 40,450 crores in March 2026. This is remarkable and indicates continued interest in equities as an asset class in spite of intermittent market volatility. Let me now move on to talk a little bit about our company performance, and I'll take you through our performance highlights. The financial year '25, '26 has been a year of strong execution across our core strategic priorities from strengthening retail flows, deepening distribution relationships scaling our product franchise and investing in technology-led operating leverage. We have also undertaken several structural initiatives to strengthen the operating platform and expanded our geographic presence in a calibrated manner while maintaining net 0 incremental cost by managing branch operations efficiently. We have significantly improved our per supervisor to feet on street ratio from approximately 1:1 to 1:5 over these recent years with 1 manager now overseeing around 5 relationship managers. Our total employee strength, which stood at 1,402 employees as of March 2024 is now at 1,248 as of March 2026. Talking about the group, UTI Group's total AUM stood at INR 23.42 lakh crores as of March 31, 2026. Our mutual fund AUM reached INR 3.88 lakh crores compared to INR 3.39 lakh crore last year. In FY '26, we added 7.16 lakh new investors as identified by that plan, taking our total folio base to INR 1.38 crores. During the year, our gross new SIP registrations crossed 14.5 lakh of which 76% were through digital channels. On the product side, we successfully launched the UTI multi-cap fund, which mobilized about INR 1,000 crores, with strong participation across banks, national distributors and addition, our UTI arbitrage fund crossed the INR 10,000 crore AUM milestone during the year. Our passive business continues to scale well with ETF AUM at INR 18,963 crores and index fund AUM at INR 5,934 crores aggregating to INR 24,897 crores during the year, and we continue to maintain leadership position in the smart beta category. We expect our momentum in this fact of business will continue to be supported by a robust pipeline of new launches during the coming year. On the institutional side of our business, which falls under our TMS division, both the EPFO and CMPF concluded the process of appointing new portfolio managers through the open bidding system -- for the third consecutive terms, UTI AC was selected as 1 of portfolio managers for EPFO. In the case of the CM PFO, we were chosen as 1 of the 2 portfolio managers for the second consecutive term both mandates have been awarded for a tenure of 5 years. Switching to our pension fund business. Our pension business grew during the year, with total AUM at INR 4.02 lakh crores representing an 11.8% increase year-on-year, while the private sector pension AUM grew by 46% year-on-year. This continues to remain an important strategic growth area for us. An important area of focus for us through the year has been digital transformation and productivity enhancement. Our digital business initiatives have delivered strong outcomes, including a 234% increase in revenue, 33% increase in transactions and a 31% reduction in cost per transaction. We recently launched 1 of the industry's first AI-powered contact center solutions, Vani, which has already automated 59% of our inbound calls -- this has materially improved customer response time and service efficiency. We also launched an in-app WhatsApp payment facility via CampsPay and are the first AMC in India to offer this service to investors to transact and engage in light chat, via WhatsApp and make payments. To bridge the gap between complex financial insights and reach a diverse investor base, we also launched an industry-first AI translated vernacular initiative with the launch of our monthly fact sheets in Hindi. We are also translating our fund manager communications into 8 regional languages. Hindi, Gujarati, Marathi, Bengali, Tamil, Telugu, Kannada and Malayalam to provide our views in regional languages for our pan-India audience. As mutual funds go deeper and deeper into the heartland of India, we think being able to provide communication in different languages will hold us in good stead. From an investment performance standpoint, we continue to remain focused on process consistency and disciplined execution. In fixed income, 50% of our AUM ran in the top 2 quarters over the 1-year period and 60% over the 3-year period. Similarly, our high-grade strategies and our value-oriented strategies have continued to show strong long-term performance in the equity -- our asset strategies have a consistent track record of low tracking difference, which is very important in terms of the investor outcomes. Our equity research coverage has further expanded in line with the growth in the market. This strengthens our ability and to identify opportunities across market segments. Overall, FY '25, '26 has been a year when we have strengthened our business across distribution, product capability, digital infrastructure and institutional trust and I would add also a very significant people refresh. Going ahead, our foremost strategic priority is to grow our mutual fund AUM while building a more resilient, diversified and scalable franchise all to be done while maintaining strong cost discipline. With that, I will now request Sandeep to take you through the operational and financial performance of the company in detail.

Thank you, sir. I will speak about UTC's performance during the fourth quarter and for the full year ended 31st March 2026. Speaking about UTI Mutual Funds performance, UTI was able to capture a market share of 5.5% of the gross sales of the industry during this quarter and market share of 6.1% of the gross sales for the financial year FY '26. Our equity quarterly average for March 2026 stood at INR 95,824 crores, rising by 5.46% as compared to the quarter ended March '25. Our quarterly average for the index and ETF funds stood at INR 176,673 crores, up by 24.86% in the fourth quarter. ETF and index fund annual net inflow stood at INR 24,897 crores. In FY '25, '26, we added 7.16 lakh new investor bank taking our total portfolio base to INR 1.38 crores. Our SIP AUM witnessed a growth of 5.91% over the corresponding quarter of last year reaching to INR 39,813 crores as of March '26. The SIP inflows for the fourth quarter stood at INR 2,457 crores. The SIP gross inflows for UTI Mutual Fund witnessed a year-on-year growth of 13.42%, with an average SIP ticket size being INR 3,381 for March 2026. For the full year, IT insured by INR 9,442 crores, higher by 13.42% as compared to INR 8,325 crores in FY '25. The active SI portfolio as on 31st March 2026, stood at INR 29.53 lakhs a 9.71% growth as compared to March '25. Speaking about UTI AMC's financial. On a stand-alone basis, the core income that is sale of service for FY '26 amounted to INR 1,255 crores as compared to INR 1,180 crores for FY '25. The normalized tax for FY '26 is INR 460 crores as compared to INR 447 crores in FY '25. The normalized PAT for FY '26 is INR 643 crores as against INR 653 crores in FY '25. The employee cost of INR 437 crores includes the onetime item on account of revision of family pension benefits of INR 25 crores in quarter 4 FY '26. Excluding this one-off item, the normalized employee cost is INR 412 crores. On a consolidated basis, the core income sale of service for FY '26 amounted to INR 1,539 crores as compared to INR 1,445 crores for FY '25. The normalized tax for FY '26 is INR 452 crores as compared to INR 492 crores in FY '25. The normalized PAT for FY '26 is INR 511 crores as against INR 731 crores in FY '25. The employee cost of INR 553 crores includes a onetime item on account of revision of family pension benefit of INR 25 crores incurred in quarter 2, FY '26. Excluding this one-off item, normalized employee cost is INR 528 crores. On UTI Pension Fund Limited, our 100% owned subsidiary UTI Pension Fund Limited has recorded a growth of 20% year-on-year in reaching INR 4 lakh crores as on quarter 4 of FY '26 and currently, it manages 24.36% of the NPA Industries AUM. UT International, which presents our international business interest has an AUM of USD 1.74 billion. That is INR 16,144 crores as of 31st March '26. Our international clients are more than in more than 30 countries and their primarily institutional pensions, insurance companies, banks and asset managers. One of our flagship and the Indian dynamic equity funds domiciled in Ireland has an AUM of USD 540 million, which is INR 5,012 crores as of March 31, 2026. On U.K. alternatives, it has an AUM of INR 5, 280 crores. It currently manages 5 active funds across performing credit and multi-strategy them. Such at Opportunity Fund I has exited all the investments and made the final distribution of -- final distribution in quarter 3 FY '26 as an above benchmark performance with an IRR of 13.4%. U.K. has an AUM of INR 609 crores and fund is currently in the investing state. During the second quarter, UT alternatives launched the forefront of the endorser. This fund has been planned as a INR 1,500 crore fund plus with INR 500 crores greenshoe option. With the current pain of INR 674 crores. UTI multi-country Fund 1 has an AUM of INR 1,598 crores, currently, the fund is in investing state. UTI real estate opportunity fund with this commitment of INR 187 crores is currently in fundraising and investing. I would now request the Managing Director and CEO for his concluding remark, sir. .

Thank you, Sandeep, for sharing the operational and financial updates of the company. I'm also pleased to inform you that at the Board meeting today, UTI AMC has declared a dividend of INR 40 per share for the financial year, '25 '26. The same is subject to the approval of shareholders at the NCE Annual General Meeting. We would like to open the forum for questions and answers. Thank you very much. .

[Operator Instructions] We'll take our first question from the line of [ Gaurav Jain from ICICI Prudential Mutual Fund. .]

My question is on the expenses side. There is some one-off you called out in Q4 FY '26, but I could not understand the pain completely. But then on reported numbers, what we are seeing is year-on-year, there is a sharp increase. So if you can help us understand what is the one-off? And for FY '27, how should we build or think about the employee expense and also the other expenses because if we look at FY '26, I don't think there is much one-off in the other expenses a bit. There, for the full year has also grown 15%, which is on the higher side. So if you can help us understand how should we think on the both from FY '27 perspective? .

Guarav, Vinay here. So on the employee cost, there is a one-off on account of BRS and family pension the total quantum of that is close to around INR 130 crores that we provision in the Q3 of this particular financial year, on account of labor code, there has been an impact of close to around INR 4 crores as well because we have to provide for an additional liability of INR 4 crores. So total employee cost that you see go to around INR 412 crores as a stand-alone and INR 528 crores at a consol level in terms of guidance for the next financial year because obviously, there will be a benefit on account of VRS, the run rate on a quarterly basis should be around INR 90 to INR 95 crores, a stand-alone entity and INR 125 to INR 130 crores on the consolidated firm, obviously, because we are building all the 3 lines of business. . With respect to the other expenses, yes, it has increased at 15%. And I would say some of these items are not actually a car but as an investment that we are doing in our business, both on the digital front as well as on the physical front. On the digital front, we have upgraded our IT infrastructure, especially with respect to the cloud infra and because of that, there is an additional expense line item close to of INR 8 crore and on the physical part, since we have expanded close to around 90 UFCs in the last 1.5 years, that has obviously increased our cost, the guidance for the other administrative expenses, it should increase close to around 7% to 8% for the stand-alone entity and maybe 100 or 200 basis points more for the consol entity since for UTI pension fund, we are expanding into newer geographies to for the consolidated one, it could be in the range of around 10%. And for the stand-alone, it's around 8% for the other expenses. Gaurav, does that answers your question? .

Yes, sir, just 1 follow-up on the employee expenses. So basically, Q4, when I'm looking at the consolidated employee expense, it is INR 132 crores. That is the normalized run rate, what you are seeing post VRad there is no one-off in this? .

Yes, there is no -- for Q4, there is no one-off. .

In that case, sir, on a year-on-year basis at the consol level, even after VRS 14% increase, right? And in Q4 to Q4, Q4 FY '25 or employment was INR 116 crores Q4 FY '26 were at INR 132 crores. So that has still grown at 14% even after the other.

Yes. Some is on account of additional provision for account on variable paid than quarterly incentive. And as I told you at a consol level, since we are expanding into all the 3 lines of business, there have been additional recruitment in all the 3, that is why it is increasing. .

Okay. Sir, my next question is to Vetri Sir, that post taking over as CEO, if you can help us understand what are the 3, 4 areas or expect that we plan to work on for the coming year and quarter is the road map that we want us to bid for how he want to run the company from here that will be helpful sir.

So Gaurav, before that, let me clarify the run rate for stand-alone, it grows to around INR 90 crore to INR 95 crore -- INR 95 crores per quarter. And for the consoles around INR 125 crores. Over to you, Vetri.

Yes. So as I said in my opening statement, I think from our point of view, the company has carried out a very significant refresh of its platforms or its technology of its infrastructure of our reach in terms of the branch expansion that we have done. So if you ask me what is the single line agenda, the single-line agenda is growth. We are operating with roughly 270 branches. I give you the employee count, which is now in the 1,200 number. And if I look at all of these numbers put together, I would say we are operating below our capacity. So the simple target over the next few years is few grow is to grow faster than certainly our peers in the top 10 of the industry, such that we can start to get the benefit of the operating leverage that is now already built in because we have absorbed a lot of those costs. From a people point of view, I mentioned in my opening comments, there's been a significant refresh in terms of the people. And also, I would say, over the last few years, there has been a dramatic transformation, if I just look at the age group of our what we call our frontline Cade, the average age of the team has dropped from 41 years in FY '21 to 36 years in FY '26, and GenZ now makes up 38% of the workforce. And if I go back 5 years, it used to make up 5% of the workforce. So there's a very dramatic people refresh, which has taken place. My sort of call out to the internal team is to mature -- they are well equipped. They are trained. They have best-in-class support be it from our data platform, be it in terms of technologies available to them to be able to raise their productivity and their efficiency so that we can raise our share of gross sales, net sales and achieve a much higher level of AUM, both in any way having to add further costs on the people front, particularly within the context of the business. So the agenda is growth. If I were to drill down into the second-line agenda, it would be to sort of grow the share of SIPs disproportionately because I think that is the key to growth, particularly on the equity side of the business, the active equity side of the business, and we know that is a much higher yielding part of our business mix. And clearly, on top of these 2, all the technology refreshes that we've done are allowing us to engage effectively with the young cohort and in the digital space. If you look at the new SIP sign-ups which are happening, I would say, given on which data point you look at, more than 50% of the SIPs are now originating digitally. So all the investment that we've made in digital is something that we hope to use once again to be able to increase our growth rate. But single line agenda, grow the business; second, manage the cost increase the efficiency and use all the other tools that I mentioned .

[Operator Instructions] next question is from the line of [ Naman Maheshwari from Sanghi Family Office. ]

Okay. So very well captured on the single focus of growth as an engine since last 3, 4 years, we had not witnessed a sharp correction led by so many headwinds into the market. But this could have been a good time to acquire customers, right, March was -- to some extent, it was pretty risky for the overall equity market. So how did we see the customer acquisition going during this time due to it? And what were the major schemes that are engaging interest of SIB buyers Also, do you connect the data of first in SIP buyers with you? Or how do you track that? If you could give some light on that. So those are some questions. .

Yes. So Naman, you're right, there was a lot of volatility, which came into the market, and we are very happy to see that investors have been consistent in their SIP, while generally March sees a higher number of SIP closures because people achieve their target, people have started -- it started the reset in the month of April and close in the month of March. But overall, there was not a very high amount of redemption pressure that the mutual fund industry saw you had asked a very interesting question on how do we track the first time SIP investor -- and we track them on the basis of the PAN number that we have. And as both Vetri and Vinay mentioned that we have invested a lot in the digital infrastructure. So we have now created a complete data lake -- and we get to know each and every investor whenever he or she comes with their polio. I mean, and start therefore, you get their entire database. So we know that whenever there is a new customer that's coming, all the data that they have -- the major theme that the first time investors generally look at are the investments, and we have seen good traction, especially from the printed platform for the GenZ investors, and they generally take their first investment at around INR 1,500 SIP.

And just to add to what -- sorry, the Vetri here -- just to add to what Sandeep said, one of the numbers that we are now tracking closely, and we are also putting that into our sales metrics so that we know what those numbers are and we know what strategies we can use to drive it. Is the new customer acquisition, which to us basically means are we getting a customer with a pan number, which we earlier did not have in our MF folio base -- so the idea is to target that number. I mentioned that last year, we added 7 lakh, so this year, we are targeting to grow that number significantly. So a lot of the activity that we are doing in the digital space as well as on ground including B30 cities, et cetera, as an example, women investors as an example, is to widen that pool because that has been our historic legacy. But also, we think that is a great way to create the customers who, as they grow, you will grow with them. What we also have now with our sales force, marketing automation, is the ability to communicate with these clients using our salesforce marketing automation and being able to cross-sell and upsell opportunities to them. We implemented the sales force marketing automation sometime in the middle of last year. Early results at this point -- I mean, early days at this point of time, but we are starting to see that driving engagement with those customers helps you make them think through their investments better and also gives you that opportunity to upsell and cross-sell. So New customer acquisition is certainly a key part of that. And now with digital, there is an ability to target and communicate appropriately with them to raise your share of AUM business.

Okay. Okay. And actually, I didn't mean to ask you from this SIP stoppage actually, I wanted to understand that the you witness any SAR inflow from first-time the world in the market was in March when there was extreme volatility. So did that help you fast track some customer acquisition by educating them rightly because we have a very strong feet on state, right? So that is what I wanted to understand. Did it accelerate during this volatility window, right? .

I mean not so much because sometimes sharp market correction also for people or processes plus March, as I mentioned, is a period when people look at SIPs and renewing their SIP. However, 1 good factor that we saw that when -- in the month of February, -- the number of new SIPs, which we opened were quite good. So -- and even in the industry level, but industry level, the numbers were slightly lower, we did better than the industry induction. So volatility has been helping in terms of getting new investors because now they look at the market being at a lower level and starting their SIP, but not so much in the month of March itself. So maybe because of the sharp volatility which we saw in the market. .

So again, Vetri here. I don't think there's a specific callout on March per se. But we track our SIPs which are sort of, let's say, canceled or ceased vis-a-vis the total SIP book and the new ships that we are adding. And we also compare how our performance is related to the industry because the same number you also get from AMC. I would say in general, we have seen our numbers have been slightly better than recent months, but I wouldn't call out something which is particularly distinct in terms of a trend. .

Okay, sir, fairly understood. Congratulations and all the best for the upcoming quarters.

Next question is from the line of Meghna Luthra from InCred Capital.

Sorry, I joined late, I'm much sure if these questions have been asked. What would -- can you please explain the impact of the revised norms these new norms from first April? .

So the -- on account of exit code has been cut by 5 basis points. And obviously, there have been some rationalization in the base as well. But fund we are of the view that whatever impact is there that we'll be passing on to the intermediaries. So we don't foresee any challenges as far as this rate cut is concerned on our AMC yield. .

Okay. Okay. Got it. And sir, secondly, what do you see as the yield impact going forward for the year? .

So it's a combination of actually what our asset mix as well. So maybe a basis point or 2 dilution could be there because ETF and index fund is growing at a slightly higher yield. And on the fixed income side as well, a stronger appetite for a low dilution product, which have a slightly lower yield as compared to a high duration or a deal fund. Maybe a basis point or 2 dilution in the overall yield number forces for financial year '26, '27.

And sir...

Just to add -- Vetri here. From my point of view, the most critical line to grow is the revenue line. Of course, I would like my higher-yielding products to grow faster. But eventually, from our point of view, there is a cost base that we have and anything that helps us grow the top line faster, we are happy to take it. There's a separate challenge of can we raise our share of higher-yielding products related to what we have in passive. We know our share of parcel . As a percentage of our total AUM is much larger than some of our peer groups. But managing yield for the sake of managing yield is not a thing that I'm in favor of, I would rather manage revenues. But yes, certainly, we would like to raise our share of net sales coming from active equity schemes. .

Got it. And sir, on the employee front, are we seeing this as a normalized run rate? Or how do we see employee costs from here on? .

Given some guidance on the employee run rate going forward, at least for the stand-alone entity is close to around INR 95 crores per quarter. And at consol, it will be closer to around INR 125 crores per quarter higher on the console side because we are building capabilities in all our 3 subsidiary lines of business. .

Got it, sir. And lastly, sir, on the pipeline of the products, what is there for the coming quarters, what can we expect? .

Yes. So we have filed visible passive funds with the -- we are going to find multiple passive funds with the regulator. And now we have received the board approval some of the funds that we are going to file with SEBI are UTI if index fund, both on the index side and the EPS side. UTI index sector leader, again, both on Index and ATF, UTI India new age consumption and UTI fund. So these are the 4 points with both index and ETFs.

I can just add to what Sandeep was saying, our focus has been only on the core diversified categories which is why you see even in the last, I would say, 3, 4, 5 years, we stayed away from launching a flurry of sector and thematic funds. Continue to be guided to that principle. We will launch in the passes the full booking because we think of those as access products. there from our point of view, we are providing access to teams and sectors which investors are welcome to take and pursue. But in the diversified space, we have covered the core categories, and there is no interest in doing anything beyond that. We do plan to, however, launch at least 1 fund in the SIS category during this current year. We -- it's a process in terms of getting all the board approval and regulatory approval. And I think if you see the industry data is clear that there's been some action and shift, but it's not that the growth over there has been manically dramatic. But we think we have 1 or 2 good product ideas and certainly, we would like to launch 1 of them during the current year. So I think that would be the target over there. Separately, we've also received the permission from the IFSC, which is Gift City, -- we already had our subsidiary, rather, which is UTI alternatives. -- they already had their license in the Gift City, but that was for a wholesale -- what they call a nonretail SME license. We have now just largely received the approval for retail SME. So we will intend during the course of this year to also use gift as a 2-way solution, both for partnering products which domestic investors might want to invest overseas. And as well as providing vehicles in Gift City for global investors who might want to invest through that route into our domestic funds. .

Okay. Sorry. And sir, lastly, on the float front, what would be the share of the banking channel in total equity and hybrid. .

Just give me a second Meghna. Yes, the share would be about 1.5%.

[Operator Instructions] our next question from the line of Mohit Mangal from Centrum Broking.

Yes. So actually, I was looking at your PPT. And I was actually a little surprised that your equity net growth both on quarterly and yearly has been kind of negative though from '25 to '26, we see some kind of moderation -- so what are our strategies to improve the net sales within the equity space, hybrid is doing well. That is fine. But within the pure equity space, what can we do to increase our market share as well as bring it in the positive territory? .

Yes. So let me answer that Vetri here. So there are things you need to do. One, of course, as I mentioned earlier, we need to raise the SIP book, right? So that is a key metric for our sales team now to raise the SIP book and that is where I believe we will be able to build the most sustainable level of both flows as well as over time, it builds into a lot more stable -- so that is point number one. Secondly, when you look at the net flow number, you're absolutely right. last year was -- I think year last year was usually negative. Last year, the negative number came down. This year, it was, I would say, almost close to 0. Now this reflects the fact that some of our strategies have seen large outflows over the last few years. See this is really a question of repositioning the sales team in terms of saying how do we take multiple products to the market? And how do we make sure that we are able to simultaneously sell and bring in net sales from different schemes. So 1 of the things we are happy is that this year, we were able to, if you look at our sort of core, what we would call 19 funds, 8 of them actually saw positive net sales and we've now reached a situation where unlike in the past, but maybe 1 or 2 flagship schemes dominated the entire inflow, we are trying to diversify the inflow across the entire basket of funds that we have. Very simply, I would say, everything from value to Garth in the middle and quality growth. So from my point of view, the only way to avoid the cyclicality, which is otherwise inherent in this business is the fact that our floors are procyclical to performance. So I would like to dial that down by making sure that we have competent silos for each of these different sort of strategies. So there's all market strategies, the salespeople are able to take some performing products. And equally, what I'm increasingly seeing in this marketplace -- is there a fair number of distribution as well as other investors are also open to seeing where is the opportunity for me to participate fund which maybe currently is suffering because market conditions are not favorable, but where perhaps something might change to my advantage in the future. So what we are trying to double down is training the sales team and empowering them, making sure that they are able to carry multiple products to the market rather than the firm be reliant only on a narrow set of funds. So that's the way we try to diversify and that is what, along with the SIPs, I think will hopefully let us turn the corner at increasingly build it into a sustainable number. .

Understood. This is helpful. Actually looking at, I mean taking this forward, and I was looking at your employee number, your employee number has reduced, but our sales team has kind of increased -- so that is something basically within your strategy to increase your net sales? I mean, should we refer to it that way? .

Sorry, will you repeat that question? .

Yes. So looking at your number of employees, number of employees were around 1,400 in Q3. That got reduced to INR 1,250 odd, but your sales was around 775, but that's around 799. So I mean I just wanted to understand that you're including our core sales team members, but at the same time, reducing your overall employee strength as well. So that's the right way to look at .

That's the right way to look at it because I think historically, if we look at our workforce, I won't just say Q3, but if I go back a little bit in time, the ratio of people who are actually responsible for bringing in business related to those who are in let's say, operate related functions who are not really people who are bringing in the money, that ratio was not a very favorable ratio for us. So what we are trying to do through all of the people refresh that I mentioned is essentially correct this, that -- of course, there will always be a large investment team. There will be a large assurance-related team, obviously, the CFO and those kind of control functions as well. But it needs to be more balanced than where we used to be. Having said that, I don't see the RM count going up too much further from here. I think we've reached a stage where with 260-odd UFCs, as we call it. I think we are pretty much fully staffed to the extent required. .

Understood. That's helpful. Lastly, on the international piece, basically, it was -- this was not a good year and even the last quarter was not good. So I think -- I mean, we had strategies earlier as well to grow this piece as well. So just wanted to know how going forward into financial year '27, should we look at this kind -- this subsidiary basically? .

To put it very simply, this is a little bit of a scion India. Domestic investors, hugely positive, hugely committed to investing for the long term. And then you see a completely opposite view point with global investors where they are pulling money out of India, right, left and center and rotating into every other developing market and, of course, to develop markets this is a freight trend that we can't do much about because appetite for India is a function of many, many things. So when you see -- I think if you look at calendar '25 and just the first quarter of the calendar '26 effectively foreigners have pulled out $40 billion out of India. So our international business, honestly, is just filling the pain of that outflow front-end center. We are looking at sort of trying to diversify that AUM. We did launch a government bond ETF thing why do we only have equity products, we should also have bond products. But it doesn't help when your currency drops 9% over the year and then your bond investors also end up with a hugely negative return. So it's just been a very, very difficult market to position India right now with global investors. But I've seen this time and again, it's a cyclical business. There are some points in time where nobody is interested in the country, and there are other points where they want to bring the money back in the flood. So right now, I would say it's just hold our ground. And where possible, we are looking to bring in some of our institutional clients into our alternative products. So we are trying to use that as a -- we actually started this last year itself, but it takes a while to get global investors completely to understand the domestic order of product thankfully UTI alternatives, having returned money on 2 of its strategies during this year have a solid track record. So I'm hoping whatever traction we see in the alternative space will help the international business sort of overcome some of the headwinds in the P&L account. But the larger challenge of India being seen negatively is a headwind that we have no way of overcoming right now.

Understood, makes sense. Lastly, on SIF,basically, I mean if you can just elaborate on -- how do you see this piece and will the yields be similar to that of mutual fund? I mean a little bit on that would be helpful.

I think too early to call that out. I think if you can do something which is genuinely differentiated in terms of risk and reward to the investor my intention would be then to price that at a superior yield to the mutual fund. But if you are offering something which is more in the nature of plain vanilla structure, which is only slightly differentiated from the traditional ever product, then your yields may not be different. . So I think it's still evolving. There's a whole series of long-short opportunities which are available in that SIF space. Some of them over time, once we have the ability to execute them in a way that it makes a material difference to the investor, right? I mean I can charge how things with the investors ends up with a risk reward ratio or with the return, which in his mind is superior to what he's getting from the inert product. Then, of course, I would like to earn a higher. But I think it's still very early days over there to give you a guidance on that. But if I can offer a product with superior risk return, long short, et cetera, of course, I would certainly like to retain a high yield for myself.

Understood. So are we kind of exploring that area? I mean, is there anything in the pipeline? .

I think the first product will be just a little bit more than a plain vanilla product. So I would not expect it on the first product. But we are trying to launch some in that long short space over time. It's still in sort of testing phase. -- which could use quant -- if we launch that successfully and we are able to build a track record. Certainly, we would like to position that as a differentiated product, and we would like the benefit of that to reflect in my yield. But again, if you just look at the market, I'm sure you've seen the data sell. I think it's very early days. The space is still evolving in terms of what does the product offer. And b, does it really meet the need of an investor which the traditional mutual fund product is not able to offer. I don't think we have solved this both ways. I think the whole industry is trying to further result. .

All right. No, no, I think that's helpful and very clear wish you all the best, sir. .

Next question is from Vijaya Rao from BOB Capital Markets.

Please provide us the yield breakup of the segment, equity debt, liquid and -- at -- and secondly, your funds are not little underperforming. What are you doing in this respect? So that your overall AUM grows a little smartly. These are 2 questions from my side. .

So Vijaya , I can provide the yield breakup. Equity and hybrid is 75 basis points. ETF and index fund put together is around 8. Cash and area around 10 basis points. and income fund is around 18 to 19 basis points. So combined put together, depending on our asset mix is weighted average yield is around 32%. .

Yes. And the second question, sir, what can you give color on how your funds are performing. If not, then what are you doing to have more funds on the on the first quartile. .

I would love to do anything if you have ideas about how I could get all the funds into first quarter and simultaneously, but I'm not sure having been a fund manager for many years. that there is an easy way to do that. But I look at it now from a business under. And from a business saying that I've got to make sure that I've got in funds which are ring-fenced for different market seasons because what will be the market season, which will cause fund of a particular market cap or fund of a particular style to do well, what season it will be is not in my control. . But what I can do is make sure that my strategy, either by number or by age, though I can really control number, not pay you are distinctly positioned from each other. So that is something that I think we have established quite well in terms of saying what is in our value-oriented strategies, what is in our blended strategy, what is in our quality growth strategy. I would only say our biggest problem has been more in the quality growth, which, to my mind, is more a function of the season of the market. Of course, there are things that we could have done better in terms of stock picking. That's a continuous process. But essentially, the season did not match what those funds were trying to do. In the GAAP side, which is the blended side, you could say there is some hope to improve execution. Those are tinkering that we continue to do. But I feel very positive that maintaining this diversified set of funds which are operating across the spectrum may not result in all my funds being in top quarter at the same point of time. But at the same time, it gives me a platform which is a lot more sustainable. -- through market cycles. So I think that's a conscious choice that we have made that we would like the platform to be diversified. We will tolerate the cycles that come. We will back our fund managers through the cycle. We engaged with the marketplace to explain how these funds are differently positioned -- we engage with the market to try and explain to them how they can exploit the positioning that we have developed for each of these funds to be able for them to meet their investment goals and their aspirations. So to my mind, that's the way to do it rather than saying that I would like all the funds to be in top quartile. What I have seen is the fund manager. If you aim for the first quarter, you will get there at some point of time. But when the market season reverses, it directly causes you to swing to the bad foot. So I'm approaching this as a business platform and saying, how do I build diversity across my platform, which will make my business less cyclical and more sustainable. .

Yes. True, sir. Very helpful. I was more inquisitive of the measures you are taking. Yes, that's helpful. .

Next question is from the line of Mahesh , an individual investor. .

My question is to Vetri Sir.. .

Sorry to interrupt, Mahesh, can you use your handset more, please? .

Sure. Is this better?

Yes. Yes. Please go ahead. .

Great. . My question is to Vetri sir. So I want to understand more of balance sheet perspective, we hold almost INR 4,000 or INR 4,500 crores of cash and investments on our book at consolidated level, and this equals to almost 35%, 40% of total market cap. And then I look at the estate AMC, this is significantly on the higher end. So I want to try to understand how do you look at this investment in cash flow from a strategic perspective? And is there any way you are planning to create value for shareholders through this part of the balance sheet as in any buyback plans given the valuations are on the lower side and also the latest buyback reform announced in the budget. So how do you see this significant portion of our balance sheet ?

Yes. Okay. Thanks. Well, I mean, we have that amount of cash on our books, also because we are a very old institution. -- and we have built up that balance sheet over time through the good work that we've done in terms of serving investors and that's where that cash balance will come from. But as you would be aware, in recent years, whatever we are generating in terms of profits, -- we are pretty much paying that out in large measure back to the shareholders by way of dividend. So we will continue that policy. There is no need to add to that cash pipe. But we also believe a company of our kind. There is a need to have some investment or rather some liquidity on the book, some cash on the books. -- there could also be opportunities down the road in terms of M&A, et cetera. So we will not add to that cash in the future because we will keep dividending out. But no other plans to do anything dramatic with the cash at this point of time. .

Okay. Understood, sir. And just a follow-up on the dividend side. The last couple of years, we declared some special dividend as well as in addition to regular dividend. And this year, I believe it's all the regular dividend. But going forward, do you have a guidance on a percentage of profits that we intend to recurs dividend? Or is it volatile that we saw in the last couple of years. So how do you give guidance on the dividend policy going forward? .

But if you look at the trend line, I'm not discussing policy, but if you look at the trend line, I think, including what we've just announced today, which is INR 40, I think roughly, we are at about 93% 95% -- 95% almost in terms of a time line. I think that's a good way to think about it. The trend line itself is suggestive of our basic view that there is no need to add any more cash on our books. We have enough liquidity for any corporate optionality that we might want to preserve, anything that we generate in the businesses, we are happy to just give it back to shareholders. This is not a capital-intensive.

Next question is from the line of [ Madera ] from Investor.

I joined a little late. Could you help me with industry has been reaching approximately INR 80 lakh crores, how is UTI's position to capture the larger share and expanding the...

Yes. So -- we are very happy that the industry is reaching new milestones and that just reinforces the belief that people have in the mutual fund penetration and in mutual funds overall. And for us, we are focusing on 3 clear growth areas. We will continue to deepen our retail participation, particularly in the SIP and the -- for the long-term flows. At the same time, we will not only reach out to the metro cities, but we are also strengthening our distribution in the 30 cities and the emerging markets. And as Vetri mentioned that we are focused on gardening our equity funds to ensure that at any point in time, some of the funds required are able to cater to the requirement of the investors. . We also mentioned that we are very strongly investing in our technology as well as in process improvement. -- and therefore, also in our communication. So we are well poised to lead and create new possibilities to participate in this growing mutual fund journey. And as we discussed that we are also looking at launching new passive funds so that investors can achieve them life cycle goods. Does that answer your question? .

Got it, sir. Got it. And secondly, like what trend are you seeing in investor behavior during the volatile market. Is there any change in the ticket size or the participation pattern?

Yes. So as we discussed that, we have seen over a period of time that investors have become more resonant and they understand that the cycles or volatility, which is there in the market will go away eventually. -- and they believe in the long-term growth story of India. So we don't see so much of redemption pressure that we used to see in the earlier years because the investors are now aware about how these markets are functioning. Having said that, March is generally a period where you see a lot of SIPs getting closed because of multiple reasons. One is people started exiting the month of April and the natural cycle closes in the month of March people look to change their SP because they would have done some portfolio readjustment. So those things will always happen, and that will show you a higher redemption of SIPs in the month of March. But overall, if you look at the trend and especially if you see the month of February, the trends are very encouraging, where we saw a drop in the number of SIPs which was being stopped at the industry level. And that number was even better if you look at the UTI overall SIP book.

Next question is from the line of Richa an individual investor. .

I have 1 question basically on the industry side. So we have been seeing there are -- there's a competition in this space. with the fintechs and even coming with their products now. So in such a competitive environment, how are we seeing the key distribution on UTI center is there any sustainable visibility over there? .

Yes. So if you look at -- we have been doubling down on our distribution, especially with the banks as well as with the fintechs. And these are 2 segments where -- which are growing. -- and especially the fintech because there are a lot of new fintechs which are coming, and the younger generation find it very easy to invest through our fintech platform. So we have increased and our engagement with them and we are seeing good traction coming especially from the fintech platform.

Yes, that answers my question. Congratulations on the good set of number.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand over the call to Mr. Vetri Subramaniam for closing comments. Over to you, sir. .

Thank you for that. Thank you, everybody, for joining us here on this call today. Hope we have been able to provide you an insight into what our thoughts are and how we are looking to move ahead in the future and look forward to engaging with you again next quarter. Thank you.

Thank you, sir. Ladies and gentlemen, thank you for joining the call. In case of any queries, feel free to connect with Adfactors Investor Relations team. You may now disconnect your lines.