SBI Funds shares slide 7% after Q2 profit miss

SBI Funds Management shares slid as much as 7% to ₹433.55 on the BSE on Monday after Q2FY27 profit missed estimates, Business Standard reported on Oct. 26.

The drop tested demand for a recently listed asset manager: at 12:32 p.m. on Oct. 26, the stock was 4% lower at ₹445.65, 24% below its ₹574 issue price, while the Sensex rose 0.15%, the report said.

Equirus Securities analysts said profit after tax was ₹701 crore in Q2FY27, the July-to-September quarter, down 6.0% year on year and below their ₹766 crore estimate. They linked the miss to operating expenses, which rose 24.3% year on year to ₹301 crore.

Revenue yield, a measure of fee income earned on assets, eased 0.6 basis point from the previous quarter to 36.1 basis points, according to Equirus. One basis point is 0.01 percentage point. Non-mutual-fund yields, excluding advisory, were 35 to 40 basis points.

The pressure was not only in profit. Equirus said equity quarterly average assets under management, or QAAUM, rose 5.6% from the previous quarter, below the industry’s 6.6% increase. SBI Funds’ equity market share fell 12 basis points to 12.53%.

Systematic investment plan flows, regular contributions by mutual-fund investors, also lost share. Equirus said monthly systematic-flow share declined to 12.0% in September 2026 from 12.65% in June 2026. SIP assets were broadly flat at ₹2.07 trillion, while their market share slipped to 11.59% from 11.64%.

New SIP additions reached 1.9 million in Q2FY27, giving SBI Funds a 9.94% share, down from 10.6% in Q1FY27, Equirus said. The brokerage kept a “Long” rating and a ₹540 target price, saying SBI-linked distribution, brand scale and alternative investment products should help the company benefit from mutual-fund industry growth.

Motilal Oswal Financial Services also kept a positive stance. The brokerage reiterated a “Buy” rating with a ₹590 target price, based on 38 times estimated FY28 core price-to-earnings, a valuation multiple comparing share price with expected profit.

Motilal said mutual-fund assets, SIP flows and State Bank of India’s distribution network continued to support the business. It also said earnings from portfolio management services and advisory were unaffected by the reallocation of a large mandate, while specialized investment fund and alternative investment fund assets continued to rise.

The stock’s fall comes three months after a closely watched listing. Atlas360 reported in July that SBI Funds Management opened a ₹9,813 crore initial public offering with a ₹545 to ₹574 price band, with BlackRock and Goldman Sachs among global institutions in the anchor book. The stock listed on July 21, according to Business Standard.

The immediate market reaction contrasts with the brokerages’ longer-term view. The available report did not include comments from SBI Funds Management management on the share move or a dated company catalyst following the Q2FY27 results.