SBI Funds Management Hits Record Low After Q2 Profit Falls 6% to ₹701 Crore as Costs Rise

SBI Funds Management shares hit a record low of ₹433.55 on October 26 after its Q2 FY27 profit fell 6% to ₹701.24 crore even as revenue grew, with higher costs trimming margins at India’s largest asset manager.

The Stock Falls to a Fresh Low

Shares of SBI Funds Management fell as much as 6.52% to ₹433.55 on Monday, October 26, compared with the previous close of ₹463.80, BusinessToday reported. The stock is now about 24% below its issue price, according to Business Standard and Whalesbook, which put the issue price at ₹574.

The drop followed the company’s second-quarter results, which it presented on October 23. Investors weighed a decline in profit against growth in revenue and a rise in costs.

Q2 FY27 Profit and Revenue

SBI Funds Management reported consolidated net profit of ₹701.24 crore for the September quarter, according to its filing. That was 6% lower than the ₹745.9 crore a year earlier and about 20.3% lower than in the preceding quarter.

Revenue from operations rose, and operating profit increased 4%, but profit after tax still declined. The investor presentation attributed the pressure on profitability to elevated expenses related to technology investments and hiring. One report put the EBITDA margin at 77%, down from 80.1%.

For the first half of FY27, consolidated net profit was ₹1,581.50 crore, compared with ₹1,594.77 crore in the same period last year, a slight fall.

Assets Under Management and SIP Momentum

The business itself continued to grow. SBI Funds Management’s quarterly average assets under management (QAAUM) in mutual funds stood at ₹13.14 lakh crore as of September 30, 2026, up 10% year on year, according to BusinessToday. The company remains India’s largest asset manager by quarterly average AUM, with a mutual fund market share of 15%.

Systematic investment plan (SIP) assets reached ₹2.07 lakh crore, up 15% year on year, while monthly SIP flows stood at about ₹3,900 crore. A SIP lets investors put in a fixed amount at regular intervals, and these flows are a key source of steady inflows for fund houses. The company launched five new schemes in the quarter, including a long-short fund focused on stocks beyond the top 100 companies, and its specialised investment fund segment reached ₹4,400 crore in QAAUM.

Why Costs Matter for an Asset Manager

An asset manager earns fees as a share of the money it manages, so revenue tends to follow AUM. When AUM grows and costs grow faster, profit can fall even as revenue rises. That is the pattern in this quarter: revenue rose about 9% while profit fell 6%.

The company’s results presentation highlighted continued SIP momentum, retail participation and investments in technology and people as key business factors during the quarter. The spending on technology and hiring is an investment, but it weighs on near-term earnings. Whether it pays off will depend on how quickly AUM and fee income expand.

Market Position and Filing Details

What is clear from the filings and the investor presentation is that the company’s AUM grew 10% over the year and that it holds a 15% share of the mutual fund industry by quarterly average AUM. Competition in the sector is intense, and fund houses compete on investment performance, distribution reach and cost.

Basic and diluted earnings per share for the quarter were ₹3.40, according to the results filing. Alongside the results, the company also announced the appointment of Giridhar Sanjeevi as an independent director and the reclassification of two promoter group entities, according to a summary of the filing.

Also Read: Shriram Finance Hits 11-Month Low After FY27 AUM Growth Guidance Cut to 15 to 17% Despite 59% Profit Jump

What to Watch Next

The company’s next quarterly results will show whether margins recover as revenue grows and whether SIP flows keep rising. Investors will also follow industry AUM data from the mutual fund industry body for any change in market share.

The figures here describe results and share prices on October 26, 2026. Share prices can move quickly in either direction and these numbers are not a prediction of future trading.