SBI Funds Management Shares Fall on Soft Quarterly Earnings
Mumbai: Shares of SBI Funds Management dropped sharply on Monday as investors reacted negatively to the company's weaker-than-anticipated performance in the September quarter of FY27. The selloff pushed the stock to its lowest point since its market debut.
Intraday, the stock slid as much as 7 per cent to Rs 433.55, which is the lowest level recorded since its July 21, 2026 listing. The stock later recovered part of its losses and settled at Rs 452.45, registering a decline of 2.45 per cent. This closing price is approximately 24.46 per cent lower than the IPO price of Rs 574 per share.
According to a brokerage report, the company's profit after tax came in at Rs 701 crore, reflecting a 6 per cent fall compared with the year-ago quarter. The main reason for the pressure on earnings was a 24.3 per cent annual jump in operating expenses, which rose to Rs 301 crore.
The report also pointed out that revenue yield declined by 0.6 basis points quarter on quarter to 36.1 basis points. Yield in the non-mutual fund segment, excluding advisory income, stayed between 35 and 40 basis points.
The company's equity quarterly average assets under management increased by 5.6 per cent, which was slower than the 6.6 per cent growth seen across the industry. This caused its market share to shrink by 12 basis points to 12.53 per cent.
The SIP business also faced some headwinds. In September 2026, the company's share of monthly SIP inflows dropped to 12 per cent from 12.65 per cent in June. SIP assets under management were broadly flat at Rs 2.07 trillion, while market share slipped marginally to 11.59 per cent. New SIP registrations stood at 19 lakh during the quarter, though market share in this category declined from 10.6 per cent to 9.94 per cent.
Despite these near-term concerns, analysts remain confident in the strength of the core mutual fund operations. Over the three-year period ending September 2026, more than half of the company's equity and hybrid assets delivered competitive returns. Net inflows into equity schemes also remain healthy.
The brokerage estimates that the company's average mutual fund AUM could compound at 13 per cent annually, while EBITDA may grow at a 10 per cent CAGR, between FY26 and FY29.
The brokerage has retained its 'Long' rating on the stock and assigned a target price of Rs 540. It credited the company's strong brand, broad distribution network and the expansion of its alternative investment business as the basis for sustained long-term growth.