Motilal Oswal Financial Services Ltd has reiterated its Buy rating on SBI Funds Management Ltd, establishing a target price of Rs 590 based on a 38x FY28E core P/E valuation. The brokerage stated that operating performance in 2QFY27 tracked in line with expectations.
Quarterly Performance and Revenue Metrics
Operating revenue expanded 9% year-on-year to approximately INR 11.9 billion during the quarter. Profit after tax recorded a 6% year-on-year decline to INR 7 billion.
- Operating Revenue: INR 11.9 billion, up 9% year-on-year.
- Profit After Tax: INR 7 billion, down 6% year-on-year.
- Average AUM: INR 13.1 trillion, up 9% year-on-year.
- Market Share: 15% market-leading position.
The contraction in profit after tax stemmed primarily from higher-than-expected operating expenses. These costs involved one-off technology infrastructure investments and personnel expenses.
Business Strength and Distribution Network
The mutual fund business demonstrated underlying resilience through steady systematic investment plan flows. Growth was further reinforced by a robust distribution network anchored by SBI-backed channels.