SBI Funds hits record low after Q2 profit miss; stock falls 24 pc below IPO price
Shares of SBI Funds Management plunged to a record low in Monday's intra-day trade after the asset manager reported weaker-than-expected earnings for the September quarter, prompting investors to dump the stock despite brokerages maintaining a positive long-term outlook.
The stock fell as much as 7 per cent to Rs 433.55 on the BSE, its lowest level since listing on July 21, 2026. It was trading at Rs 445.65, down 4 per cent, during noon trade. The stock is currently trading about 24 per cent below its issue price of Rs 574 per share.
Trading activity remained robust, with nearly 2.52 million shares changing hands across the NSE and BSE, nearly double the average volume.
The sharp decline came after the company reported a weaker-than-anticipated performance for the second quarter of FY27. According to Equirus Securities, SBI Funds Management posted a profit after tax (PAT) of Rs 701 crore, down 6 per cent year-on-year.
The earnings shortfall was primarily attributed to operating expenses, which rose 24.3 per cent year-on-year to Rs 301 crore.
The brokerage also noted that revenue yield declined by 0.6 basis points quarter-on-quarter to 36.1 basis points, while non-mutual fund yields excluding advisory remained in the 35-40 basis point range.
SBI Funds Management's equity quarterly average assets under management (QAAUM) increased 5.6 per cent sequentially, lagging the industry's 6.6 per cent growth rate. As a result, the company's market share declined by 12 basis points quarter-on-quarter to 12.53 per cent.
The firm's share in monthly systematic investment plan (SIP) inflows also weakened, falling to 12 per cent in September 2026 from 12.65 per cent in June.
SIP assets under management remained largely unchanged at Rs 2.07 trillion, while market share edged lower to 11.59 per cent from 11.64 per cent.
New SIP registrations stood at 1.9 million during the quarter, with market share declining to 9.94 per cent from 10.6 per cent in the previous quarter.
Despite the near-term pressure, analysts highlighted that the company's core mutual fund franchise remains healthy. More than half of its equity and hybrid assets under management continued to deliver competitive performance over the three-year period ended September 2026, while equity net inflows remained resilient.
Equirus Securities said it expects the company to deliver a 13 per cent compound annual growth rate (CAGR) in mutual fund average assets under management and a 10 per cent EBITDA CAGR between FY26 and FY29.
The brokerage retained its "Long" rating on the stock with a target price of Rs 540 per share, citing the company's strong brand, extensive distribution network and growing alternatives business.
