SBI Funds Fall 7% After Q2, Hit New Low; 24% Below Issue Price

SBI Funds Shares Test Investor Confidence After a Mixed Quarter

The sharp post-results decline reflects a gap between steady business activity and weaker-than-expected earnings, alongside softer measures of market share.

A fresh low puts the post-listing decline in focus

SBI Funds Management fell to an intraday low of ₹433.55 on the BSE, down 7% during Monday’s trade, after announcing its July-to-September results. At 12:32 PM, it was quoted 4% lower at ₹445.65, while the Sensex was up 0.15%. The two prices capture different points in the session: ₹433.55 was the intraday low, while ₹445.65 was the later quoted price.

Trading activity was elevated, with average volume nearly doubling and 2.52 million shares changing hands across the NSE and BSE. The low was the stock’s weakest level since its listing on July 21, 2026. At ₹433.55, the shares were about 24% below their ₹574 issue price, a decline that places the market’s response to the latest results in the context of a broader post-listing retreat.

Profit shortfall and higher costs weigh on the quarter

The company reported profit after tax of ₹701 crore, down 6% year on year and below the ₹766 crore estimate cited by Equirus Securities. The brokerage attributed the shortfall to operating expenses of ₹301 crore, which rose 24.3% from a year earlier. Revenue yield also edged down 0.6 basis points quarter on quarter to 36.1 basis points.

These figures matter because they show pressure on both costs and the revenue earned relative to assets managed, even as the business continued to attract investment. The quarter’s earnings therefore present a less buoyant picture than asset growth alone might suggest. Whether rising costs translate into sustained pressure on profits will be important to monitor in subsequent results; the supplied figures do not establish that as a trend.

Asset growth remained positive, but share indicators softened

Equity quarterly average assets under management grew 5.6% sequentially, below the industry’s 6.6% increase. SBI Funds Management’s equity market share consequently eased by 12 basis points to 12.53%. Its monthly systematic-flow market share slipped to 12% in September 2026 from 12.65% in June.

SIP assets were broadly unchanged at ₹2.07 trillion, while SIP market share edged down to 11.59% from 11.64%. The company added 1.9 million new SIPs in the quarter, but its share of additions was 9.94%, compared with 10.6% in the preceding quarter. These measures offer investors a closer look at whether the company is keeping pace with industry growth, beyond the headline increase in assets.

Brokerage views remain constructive, with execution to watch

Equirus Securities said scheme performance was broadly within range and estimated that more than half of equity and hybrid assets were in the top two quartiles over the three-year period as of September 2026. It retained a ‘Long’ rating with a ₹540 target price and modelled 13% mutual fund average AUM and 10% EBITDA compound annual growth over FY26-FY29E.

Motilal Oswal Financial Services reiterated a ‘Buy’ rating and a ₹590 target price, saying it had broadly kept estimates unchanged after the quarter. It highlighted continued SIP momentum, the SBI-backed distribution network, and growth in specialised investment fund and alternative investment fund assets. These are brokerage assessments, not assured outcomes. For investors, the contrast between those longer-term expectations and the quarter’s profit miss and softer flow-share measures is central to assessing the stock.

Key Highlights

• Shares touched ₹433.55, their lowest level since listing, and were about 24% below the ₹574 issue price.
• Second-quarter profit after tax was ₹701 crore, 6% lower year on year and below the cited ₹766 crore estimate.
• Operating expenses increased 24.3% year on year to ₹301 crore; revenue yield eased to 36.1 basis points.
• Equity average AUM rose 5.6% quarter on quarter, trailing industry growth of 6.6%.
• Brokerages retained positive ratings, with target prices of ₹540 and ₹590; those views depend on expected growth and execution.

Investor Note: The fall in SBI Funds Management shares highlights the market’s focus on earnings quality and relative growth, not just AUM expansion. Investors may weigh the company’s distribution reach and continued asset inflows against the profit miss, rising costs and softer flow-market-share indicators, while treating brokerage targets as estimates rather than guarantees.