SBI Funds slips 7%, hits new low post Q2 results; down 24% from issue price

Analysts believe that its franchise strength, wide distribution network and expansion in alternatives are likely to help SBI Funds Management capitalise on industry tailwinds.

SBI Funds Management share price movement

 

SBI Funds Management hit a new low of ₹433.55, falling 7 per cent on the BSE in Monday’s intraday deals amid heavy volume after the company announced its second quarter (July to September) results.

 

The stock quoted at its lowest level since listing on July 21, 2026. Currently, SBI Funds Management trades 24 per cent lower against its issue price of ₹574 per share.

 

At 12:32 PM, SBI Funds Management quoted 4 per cent lower at ₹445.65 on the BSE, compared to a 0.15 per cent rise in the BSE Sensex. The average trading volume at the counter nearly doubled with a  combined 2.52 million equity shares changing hands on the NSE and BSE. CHECK Stock Market LIVE Updates 

 

SBI Funds Management – Brokerages view post Q2 results

 

SBI Funds Management is one of India’s leading asset management companies, backed by the strong lineage of the State Bank of India and its joint venture partnership with AMUNDI, a globally renowned asset manager based in France. The company offers a comprehensive suite of investment solutions, including actively managed and passive mutual funds, portfolio management services, and alternative investment products. 

 

SBI Funds Management delivered a steady performance during the quarter, supported by healthy equity and passive flows, sustained systematic investment plan (SIP) momentum, rising retail participation, and continued investments in people and technology.

 

However, SBI Funds Management’s Q2FY27 profit after tax (PAT) of ₹701 crore (-6.0 per cent year-on-year(YoY) fell short of estimates (₹766 crore), weighed down by operating expenses of ₹301 crore (+24.3 per cent YoY), according to analysts at Equirus Securities. 

 

Revenue yield eased 0.6 bps quarter-on-quarter (QoQ) to 36.1 bps. Non-mutual fund yields, excluding advisory, stood at 35-40 bps.

 

SBI Funds Management’s equity quarterly average assets under management (QAAUM) grew 5.6 per cent QoQ, trailing the industry’s 6.6 per cent growth, lowering market share by 12 bps QoQ to 12.53 per cent. Monthly systematic-flow market share declined further to 12.0 per cent in September 2026 from 12.65 per cent in June 2026. SIP AUM was broadly unchanged QoQ at ₹2.07 trillion, while market share eased to 11.59 per cent from 11.64 per cent. New SIP additions totaled 1.9 million in Q2FY27, with market share at 9.94 per cent vs 10.6 per cent in Q1FY27, the brokerage firm said. 

 

Meanwhile, SBI Funds Management’s scheme performance have broadly been in range with more than 50 per cent of the equity/hybrid AUM in Q1/Q2 in the 3-year timeframe as of September 2026, while estimated equity net flows remained healthy. The brokerage firms aid it models a 13 per cent MF AQAAUM compound annual growth rate (CAGR) and 10 per cent earnings before interest, taxes, depreciation, and amortization (EBITDA) CAGR over FY26-FY29E. Franchise strength, a wide distribution network and expansion in alternatives is likely to help SBI Funds Management capitalise on industry tailwinds, analysts said and retained a  ‘Long’ rating on the stock with a target price of ₹540 per share.

 

The mutual fund business remains strong, supported by continued growth in AUM, resilient SIP flows, and a robust SBI-backed distribution network. Continued improvement in flows and yields remains a key earnings driver. Portfolio management services (PMS) & advisory business earnings remain unaffected by the reallocation of a large mandate, while specialized investment fund (SIF) and alternative investment fund (AIF) AUM continue to rise. Increased investments in technology are expected to enhance productivity, according to analysts at Motilal Oswal Financial Services.

 

The brokerage firm said it has broadly kept estimates intact, considering the in line operating performance in Q2FY27. Analysts reiterated a 'Buy' rating on the stock with a target price of ₹590, based on a valuation of 38x FY28E core P/E.    Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.