Shares of SBI Funds Management plunged to a record intra-day low on Monday, 26 October 2026, after the asset manager reported weaker-than-expected earnings for the September quarter (Q2 FY27), triggering a sharp sell-off even as brokerages maintained a positive long-term stance on the stock.

How Far the Stock Has Fallen

The scrip tumbled as much as 7% to ₹433.55 on the Bombay Stock Exchange (BSE) — its lowest level since listing on 21 July 2026. By noon trade, it had partially recovered to ₹445.65, still down 4% on the day. At that level, the stock was trading approximately 24% below its issue price of ₹574 per share, a significant markdown for investors who subscribed at the initial public offering.

Trading volumes underscored the bearish sentiment: nearly 2.52 million shares changed hands across the NSE and BSE during the session, almost double the stock's average daily volume.

What Went Wrong in Q2 FY27

According to Equirus Securities, SBI Funds Management posted a profit after tax (PAT) of ₹701 crore for the quarter, down 6% year-on-year. The earnings shortfall was primarily driven by a sharp rise in operating expenses, which surged 24.3% year-on-year to ₹301 crore.

Revenue yield also came under pressure, declining 0.6 basis points quarter-on-quarter to 36.1 basis points. Non-mutual fund yields, excluding advisory income, remained in the 35–40 basis point range.

Market Share Slippage Adds to Concern

The firm's equity quarterly average assets under management (QAAUM) grew 5.6% sequentially, lagging the industry's 6.6% growth rate. As a result, its market share in equity assets slipped 12 basis points quarter-on-quarter to 12.53%.

The erosion extended to systematic investment plans (SIPs). The company's share of monthly SIP inflows declined to 12% in September 2026 from 12.65% in June. SIP assets under management held broadly steady at ₹2.07 trillion, but the corresponding market share edged lower to 11.59% from 11.64%. New SIP registrations during the quarter stood at 1.9 million, with market share falling to 9.94% from 10.6% in the previous quarter.

Brokerages Hold the Line on Long-Term View

Despite the near-term headwinds, analysts noted that SBI Funds Management's core mutual fund franchise remains structurally intact. More than half of its equity and hybrid assets continued to deliver competitive performance over the three-year period ended September 2026, and equity net inflows remained resilient.

Equirus Securities retained its 'Long' rating on the stock with a target price of ₹540 per share, projecting a 13% CAGR in mutual fund average assets under management and a 10% EBITDA CAGR between FY26 and FY29. The brokerage cited the company's strong brand, extensive distribution network, and a growing alternatives business as key long-term drivers.

With the stock now deep below its IPO price, the near-term trajectory will hinge on whether the company can rein in operating costs and reclaim lost market share in the quarters ahead.