UPDATE 3-T Rowe Price rises on beats, deal talks

* EPS 50 cents; Street view 46 cents

* Says in talks to buy 26 percent of Indian fund firm UTI

* Shares up 11.6 percent (Recasts; adds share rise, India talks and byline)

By Ross Kerber

BOSTON, Oct 23 (Reuters) - Asset manager T Rowe Price Group (TROW.O) reported higher-than-expected quarterly results on Friday and said it was in talks to buy a stake in a fund firm in India, sending its shares soaring more than 11 percent.

T Rowe, one of the largest US fund companies, reported net income of $132.9 million, or 50 cents per share, down from $152.8 million, or 56 cents per share, a year earlier.

Revenue fell to $498.1 million from $554.8 million, mainly because investment advisory fees dropped to $417.3 million from $465.7 million.

The results beat analysts' average forecast for earnings of 46 cents a share on revenue of $495.5 million, according to Thomson Reuters I/B/E/S.

Buckingham Research analyst William Katz said the beats were a key reason for the rise in T Rowe shares, which were up 11.6 percent $54.82 in morning trade.

Katz also cited T Rowe's disclosure in a securities filing that it is in talks to buy a 26 percent stake in India's UTI Asset Management Co, which had average assets under management of $15.9 billion in September.

A UTI spokeswoman said she could not immediately comment on the matter.

T Rowe Chief Executive James Kennedy told Reuters in a phone interview from the firm's London office that fast-growing overseas markets offer many growth opportunities.

He said fees were lower in the third quarter because assets under management declined from a year earlier due to falling stock markets.

But assets under management rose from the second quarter, up 16 percent to $366.2 billion.

T Rowe reported net inflows of $2.6 billion to its mutual funds in the third quarter. Investors poured $3.5 billion into its bond funds, offsetting $900 million withdrawn from money market funds.

Kennedy said he expects money to continue to move into stock and fixed income funds. "People are looking for yield and willing to take on more risk," he said.

T Rowe does not make specific forecasts on future results, but Kennedy said in a statement that the company's long-term outlook "remains strong."

Shares of Baltimore-based T Rowe have risen 34 percent this year. But its rivals have done better, in particular BlackRock Inc (BLK.N), which will be the world's largest money management firm when its acquisition of the asset management business of Barclays Plc (BARC.L) closes at year-end. (Reporting by Ross Kerber; Editing by Lisa Von Ahn and John Wallace)