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Equity Market Insight by UTI Mutual Fund – Performance & Trends

Explore the latest market insights on UTI Mutual Fund's equity portfolio. Stay updated on performance trends, investment strategies, and market outlook to make informed decisions

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Equity Market Insight by UTI Mutual Fund – Performance & Trends

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  1. Market Insight – Equity An overview on Equity Markets March 2025 1 MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.

  2. Changing world order leading to Increased capital spend targets by Europe European military budgets dwarfed by US/ China/ Russia German military expenditure only 7% of US military expenditure 2 Source: Stockholm International Peace Research Institute (SIPRI). Note: latest data as of 2023. BofA Global Research

  3. Negative Fiscal Impulse coming down in magnitude compared to FY25 3 Source: Goldman Sachs Global Investment Research. Estimates are based on actual fiscal deficit numbers up to FY24. FY25 is as per revised estimate and FY26 is as per budget estimate.

  4. While Gross FDI has been holding on, Buoyant markets led to Equity Repatriation spike Net FDI inflows dropped, the lowest over a decade Equity repatriation constituted 96% of total FDI repatriation in 9MFY25 ▪ Given the selloff in the market of ~20% in USD terms from Sep’24 highs, the repatriation might slow down ▪ 4 Source: DPIIT, Avendus Spark Research

  5. INR has performed well vs other EM currencies INR vs EM Currencies 5 Source: Bloomberg, Nuvama Research

  6. Economic Indicators 6

  7. Economic Indicators and Forecasts Indicator Economic Activity Real GDP (YoY%) Gross Fixed Investment (YoY%) Industrial Production (YoY%) Price Indices CPI (YoY%) WPI (YoY%) External Balance Current Account (% of GDP) Fiscal Balance Fiscal Deficit (% of GDP) Interest Rates Central Bank Rate (%) 10-Year Note (%) Exchange Rates USDINR FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25F FY26F FY27F 8.0 6.5 3.3 8.3 8.5 4.6 6.8 7.8 4.4 6.5 11.2 3.8 3.9 1.1 -0.8 -5.8 -7.1 -8.4 9.7 17.5 11.4 7.6 8.4 5.2 9.2 8.8 6.0 6.3 6.8 4.2 6.5 7.0 5.1 6.5 7.2 5.4 4.9 -3.7 4.5 1.7 3.6 2.9 3.4 4.3 4.8 1.7 6.2 1.3 5.5 13.0 6.7 9.4 5.4 -0.7 4.8 2.4 4.3 3.2 4.4 3.3 -1.1 -0.7 -1.8 -2.1 -0.9 0.9 -1.2 -2.0 -0.7 -1.1 -1.1 -1.1 -3.9 -3.5 -3.5 -3.4 -4.6 -9.2 -6.7 -6.4 -5.6 -4.8 -4.5 -4.3 6.8 7.5 6.3 6.7 6.0 7.4 6.3 7.4 4.4 6.1 4.0 6.2 4.0 6.8 6.5 7.3 6.5 7.1 5.8 6.5 5.7 6.6 66.2 64.9 65.2 69.1 75.5 73.1 75.8 82.2 83.4 88.1 88.7 86.5 7 Source: Phillip Capital, Bloomberg forecasts as of March 4, 2024. Interest rates and exchange rates are as of end of Financial year

  8. High Frequency Indicators Jan- 24 16.5 36.9 53.4 9.0 617 153.5 61.2 195.1 216.8 11.0 16.1 12.6 8.8 3777 -2073 1888 7.3 4.7 5.6 3.3 6.4 Feb- 24 -0.5 41.4 60.1 8.0 619 147.1 60.6 194.3 202.9 10.8 16.5 12.5 8.8 4081 -1862 1892 6.8 4.8 7.6 2.2 10.1 Mar- 24 13.4 41.7 57.3 13.7 646 159.9 61.8 219.4 217.6 11.2 16.3 12.9 8.8 3886 -386 1856 2.9 3.7 8.6 3.6 8.7 Apr- 24 16.9 35.3 54.3 6.6 638 147.7 61.5 192.3 210.0 11.3 15.3 12.7 8.9 4115 202 2087 7.8 2.4 10.2 1.3 1.5 May- 24 14.4 39.6 62.1 7.5 652 154.6 60.5 190.6 209.7 11.3 16.1 12.2 8.8 4040 -1377 1968 1.9 4.4 13.8 3.7 3.7 Jun- 24 35.0 35.2 56.7 9.1 652 150.7 60.9 198.5 204.0 10.1 13.8 10.6 8.9 4225 -547 1952 2.3 5.8 8.6 6.8 10.1 Jul- 24 14.0 22.8 57.5 9.1 667 149.4 60.7 174.6 205.1 10.4 15.0 11.0 8.9 4589 1027 1783 10.7 7.3 8.0 6.0 4.6 Aug- 24 -15.8 34.6 64.3 13.9 684 145.7 60.7 176.5 206.1 10.2 15.0 11.3 8.9 4711 1509 2065 -3.1 5.7 -3.7 6.7 0.0 Sep- 24 11.9 34.3 54.0 16.0 705 146.9 58.3 178.8 202.0 10.8 14.4 12.0 9.0 3976 1009 2383 -4.4 6.4 0.5 5.9 -5.8 Oct- 24 1.6 39.0 63.1 -5.1 685 150.2 59.1 187.2 212.9 11.5 13.3 12.2 9.0 4451 1500 2558 4.1 8.1 2.0 -3.4 1.5 Nov- 24 10.0 32.0 63.9 -1.5 658 148.1 58.6 177.6 201.0 11.4 13.4 12.4 9.0 4451 1386 1952 10.6 11.9 4.4 -5.0 1.2 Dec- 24 11.1 38.0 60.0 12.8 640 157.2 59.2 200.8 221.7 9.6 12.5 10.2 9.0 4358 -685 1420 3.5 8.2 6.2 4.0 2.2 Jan- 25 4.6 36.4 59.4 -1.5* 631 155.6* 57.7 220.0 225.8 9.9 12.5 10.6 9.0 4565 -2036 1926 2.4 11.3 1.3 6.1 2.0* Gross tax collection (YoY %) Export (Rs Bn) Import (Rs Bn) Capital flows (USD bn) Forex Reserves (USD bn) IIP (Index) Composite PMI (Index) Cement Production (Index) Steel Production (Index) M3 (YoY, %) Bank Credit (YoY, %) Deposits (YoY, %) Median MCLR (%) CP Issuance (Rs Bn) LAF (Rs Bn, Daily Average) Automobile Sales ('000) Fuel Consumption (YoY %) Air Traffic (YoY %) Electricity production (YoY %) Port volume (YoY, %) Rail Freight (YoY, %) Fiscal Foreign Trade Industry Banking Consumer Infrastructure 8 Source: RBI, CSO, PPAC, SIAM, Various Ministries, Bloomberg *Phillip Capital estimates

  9. Equity Markets & Valuation 9

  10. Domestic Sectors Performance 1 Year 1 Month 3 Months Broad Market Indices Nifty 50 Nifty 50 Nifty 50 -5.9% -8.3% 0.6% Nifty 100 Nifty 100 Nifty 100 -10.3% -0.2% -6.5% Nifty Midcap 100 Nifty Midcap 100 -15.0% -0.9% Nifty Midcap 100 -10.8% Nifty 500 Nifty 500 -12.4% -1.0% Nifty 500 -7.9% Nifty Next 50 Nifty Next 50 -19.3% -3.3% Nifty Next 50 -9.6% Nifty Smallcap 100 Nifty Smallcap 100 -21.2% -8.0% Nifty Smallcap 100 -13.1% -30.0% -20.0% -10.0% 0.0% -15.0% -10.0%-5.0% 0.0% 5.0% -20.0% -15.0% -10.0%-5.0% 0.0% Financial Services Financial Services Financial Services -0.8% 12.8% -4.1% Services Sector Services Sector Services Sector -4.2% 6.2% -8.0% Private Bank Private Bank -0.7% Private Bank 4.8% -4.4% Sectoral/ Thematic Indices Bank Bank -2.5% 4.8% Bank -7.1% Pharma Pharma -7.6% 4.3% Pharma -10.9% Metal Metal -2.1% 3.8% Metal -9.0% Consumption Consumption -8.6% 3.6% Consumption -11.2% Auto Auto -10.4% 0.4% Auto -12.3% MNC MNC -9.2% -0.6% MNC -13.6% IT IT -12.5% -1.1% IT -13.5% Infrastructure Infrastructure -8.2% -5.2% Infrastructure -12.2% FMCG FMCG -10.6% -6.2% FMCG -12.5% Realty Realty -13.4% -12.4% Realty -21.8% PSU Bank PSU Bank -10.5% -18.4% PSU Bank -17.0% Energy Energy -11.4% -22.7% Energy -19.9% Media Media -12.2% -32.3% Media -30.5% -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% -55.0% -35.0% -15.0% 5.0% 25.0% -45.0% -35.0% -25.0% -15.0% -5.0% 10 Source : Bloomberg. Data as of 28/Feb/2025. Absolute returns for the Nifty PRI of the respective sector

  11. Global Markets Performance 1 Year 1 Month 3 Months Hongkong Hongkong 38.9% Hongkong 18.1% Germany Germany 3.8% 27.6% Germany 14.9% South Africa South Africa 0.0% 18.2% South Africa 1.7% UK 1.6% UK 15.5% UK 6.3% Global Market Indices GLOBAL MARKET INDICES Switzerland 3.2% Switzerland 13.7% Switzerland 10.5% US -1.6% US US 12.4% -2.4% China 2.2% China China -0.2% 10.1% Australia -4.2% Australia -3.1% Australia 6.2% France 2.0% France 12.1% France 2.3% India India -15.0% India -0.9% Brazil -2.6% Brazil -2.3% Brazil -4.8% Japan -6.1% Japan -2.8% Japan -5.1% Indonesia Indonesia -11.9% Indonesia -14.3% -10.0% -5.0% 0.0% 5.0% -35.0% -15.0% 5.0% 25.0% -35.0%-15.0% 5.0% 25.0% 45.0% Returns are in absolute (point-to-point). Index representation: Brazil - Brazil Ibovespa Index; France - Cac 40 Index; Germany - Dax Index; US - Dow Jones Indus. Avg; UK - FTSE 100 Index; South Africa - FTSE/JSE Africa All Share; Hongkong - Hang Seng Index; Indonesia - Jakarta Composite Index; India - Nifty 50; Japan - Nikkei 225; Australia - S&P/ASX 200 Index; China - Shanghai Se Composite; Switzerland - Swiss Market Index. Source: Bloomberg. Data as of 28/Feb/2025 11

  12. Earnings Trend BSE Sensex EPS Trend Nifty 50 EPS Trend 9%13% 131161172225268240 251314341356399 39939540745748548953977583598210661209 92 Mar-25E Mar-26E Mar-93 Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Source: Bloomberg, MOSL estimates for FY25 & FY26. Data as of 3/Mar/2024 The vertical axis is on a logarithmic scale Nifty 50, EPS: Earnings per share. CAGR: Compound annual growth rate 12

  13. P/E valuations Nifty 50 Forward P/E Nifty 50 Trailing P/E Forward P/E Average P/E +1 std dev -1 std dev Trailing P/E Average P/E +1 std dev -1 std dev 30 24 28 22 EXPENSIVE EXPENSIVE 26 20 24 19.1 23.6 P/E Multiple P/E Multiple FAIRLY VALUED 18.08 18 22 20.42 FAIRLY VALUED 20.2 20 16.1 16 18 14 16.8 16 13.1 CHEAP 12 CHEAP 14 12 Mar-15 10 Mar-15 Mar-17 Mar-19 Mar-21 Mar-23 Mar-25 Mar-17 Mar-19 Mar-21 Mar-23 Mar-25 Data Source: Bloomberg, P/B - Price to Book Ratio, P/E - Price to Earnings Ratio, Avg: Average, std dev: Standard Deviation, Data from 1/Mar/2006 to 3/Mar/2025 13

  14. P/B Ratio & RoE Nifty 50 RoE Nifty 50 Trailing P/B Trailing P/B Average +1 std dev -1 std dev Return on Equity 20 4.5 EXPENSIVE 18 4.0 3.7 16 15.97 3.5 FAIRLY VALUED 3.26 3.1 14 3.0 RoE 12 2.5 2.5 10 2.0 CHEAP 8 Mar-15 1.5 Mar-17 Mar-19 Mar-21 Mar-23 Mar-25 Mar-15 Mar-17 Mar-19 Mar-21 Mar-23 Mar-25 Data Source: Bloomberg, P/B - Price to Book Ratio, Avg: Average, std dev: Standard Deviation, Data from 31/Mar/2006 to 3/Mar/2025 14

  15. P/B Ratio: Mid caps & Small caps Nifty Smallcap 250 Trailing P/B Nifty Midcap 150 Trailing P/B Trailing P/B Average P/B +1 std dev -1 std dev Trailing P/B Average P/B +1 std dev -1 std dev 5.0 6.0 5.5 4.5 5.0 EXPENSIVE 4.0 EXPENSIVE 4.65 4.5 3.5 3.3 3.18 P/B Multiple 4.0 P/B Multiple 4.0 3.0 FAIRLY VALUED 3.5 FAIRLY VALUED 2.5 2.3 3.0 3.0 2.0 2.5 1.5 1.5 2.0 2.0 1.0 CHEAP 1.5 CHEAP 0.5 Mar-15 1.0 Mar-15 Mar-17 Mar-19 Mar-21 Mar-23 Mar-25 Mar-17 Mar-19 Mar-21 Mar-23 Mar-25 Data Source: Nifty Indices, P/B - Price to Book Ratio, std dev: Standard Deviation, Data from 3/Apr/2006 to 3/Mar/2025 15

  16. Equity allocation framework for investors Equity Valuation Index 170 TAKEAWAYS Decrease Equity Allocation 160 ► Equity Valuation Index is a guidance for lumpsum allocations into the equity schemes Invest in Equity through STPs 150 140 ► Current index level suggests that investors can increase equity allocations in a staggered manner 130 Fair Value for Equity Investing 120 ► This valuation framework is generic, and investors should consult with their financial advisers for suitability relative to their financial goals 110 Increase Equity Allocation 100 90 Significantly Increase Equity Allocation 80 Data as of 3/Mar/2025. Equity Valuation Index is a composite mix of Price to Book (PB), 1-year Forward Price to Earnings (PE), Dividend Yield and Yield Gap. It is a proprietary model of UTI AMC Ltd. used for assessing equity market valuations. This index is derived from analysis of the factors from 1/Jan/2012 onwards on a weekly frequency and does not guarantee the return outcome in future. 16

  17. Equity Valuation Index: Forward returns 1-year Forward Returns Average Max Min 2% 6% 12% 14% 36% 83% 75% 52% 44% 45% 21% 10% 15% 2% -15% -4% -21% -23% -31% -45% Decrease Equity Allocation Invest in Equity through STPs Fair Value for Equity Investing Increase Equity Allocation Significantly Increase Equity Allocation No./ % of observations 20 / 3% 73 / 12% 241 / 38% 202 / 32% 96 / 15% % of instances (Negative Return) 40% 12% 20% 6% 0% % of instances (Return >12%) 0% 21% 54% 57% 95% Data as of 3/Mar/2025. Equity Valuation Index is a composite mix of Price to Book (PB), 1-year Forward Price to Earnings (PE), Dividend Yield and Yield Gap. It is a proprietary model of UTI AMC Ltd. used for assessing equity market valuations. This index is derived from analysis of the factors from 1/Jan/2012 onwards on a weekly frequency and does not guarantee the return outcome in future. 17

  18. Key take away ▪ US tariff risks pose challenges to global economy ▪ India GDP growth has rebounded to 6.2% in Dec’24 quarter compared to revised 5.6% growth in Sep’24 ▪ High frequency indicators remain mixed ▪ RBI continues its efforts to improve durable liquidity in the system ▪ Our in-house Equity valuation index (based on Nifty-50 Index) has entered increase equity allocation zone after almost two years ▪ Nifty Midcap 150 Index valuations is still rich, while Nifty Smallcap 250 Index valuations just touching fair value zone ▪ Nifty 50 Index after the fall of ~15% from peak since Sep 2024 is now in fair value zone ▪ Consensus earnings growth are estimated to grow 13% for Nifty 50 Index in FY26 which could have some downward risk ▪ Asset allocation and risk management should be the focus for investors in the current environment ▪ Balanced Advantage, Multi Asset Allocation, Equity Savings Funds can be considered for lump-sum investments ▪ After 4 years of value style outperformance, trend reversal in favour of ‘quality-growth style’ over ‘value’ is now visible ▪ Investors should adopt a staggered approach towards equities – the bias is toward Large caps based on relative valuations Source: Bloomberg, CSO 18

  19. Disclaimer REGISTERED OFFICE: UTI Tower, ‘GN’ Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400051. Phone: 022 6678 6666. UTI Asset Management Company Ltd (Investment Manager for UTI Mutual Fund) Email: invest@uti.co.in. (CIN-L65991MH2002PLC137867). For more information, please contact the nearest UTI Financial Centre or your AMFI/ NISM certified Mutual Fund Distributor (MFD) for a copy of the Statement of Additional Information, Scheme Information Document and Key Information Memorandum cum Application Form. Disclaimers: The information on this document is provided for information purposes only. It does not constitute any offer, recommendation, or solicitation to any person to enter any transaction or adopt any hedging, trading, or investment strategy, nor does it constitute any prediction of likely future movements in rates or prices or any representation that any such future movements will not exceed those shown in any illustration. Users of this document should seek advice regarding the appropriateness of investing in any securities, financial instruments, or investment strategies referred to in this document and should understand that statements regarding future prospects may not be realized. The recipient of this material is solely responsible for any action taken based on this material. Opinions, projections, and estimates are subject to change without notice. UTI AMC Ltd is not an investment adviser and is not purporting to provide you with investment, legal, or tax advice. UTI AMC Ltd or UTI Mutual Fund (acting through UTI Trustee Company Pvt. Ltd) accepts no liability and will not be liable for any loss or damage arising directly or indirectly (including special, incidental, or consequential loss or damage) from your use of this document, howsoever arising, and including any loss, damage or expense arising from, but not limited to, any defect, error, imperfection, fault, mistake or inaccuracy with this document, its contents or associated services, or due to any unavailability of the document or any part thereof or any contents or associated services. All complaints, regarding UTI Mutual Fund can be directed towards service@uti.co.in and for any unsatisfactory or lack of response visit https://scores.sebi.gov.in (SEBI SCORES portal) and/or visit https://smartodr.in/ (Online Dispute Resolution Portal). Mutual Fund investments are subject to market risks, read all scheme related documents carefully. 19

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