SBI Funds Mgt. Q1 FY27 Earnings Call — Analysis (NSE: SBIFUNDS)
SBI Funds Management Q1 FY27 profit after tax up 37% QoQ to ₹873 Cr on operating revenue of ₹1,149 Cr (+15% YoY), driven by AUM growth and margin resilience.
The take
Q1FY27 Operating Revenue ₹1,149 Cr ( +15% YoY ) . New story: SIP-led retail AUM growth .
Results
Operating revenue ₹1,149 Cr, +15% YoY; operating profit ₹907 Cr, +17% YoY; PAT ₹873 Cr, +37% QoQ; mutual fund QAAUM ₹12.6 trillion, +11% YoY.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Operating Revenue | ₹1,149 Cr | +15% | yoy · Q1FY27 · compared to ₹997 Cr in Q1FY26 |
| Operating Profit | ₹907 Cr | +17% | yoy · Q1FY27 |
| Profit After Tax | ₹873 Cr | +37% | qoq · Q1FY27 · QoQ growth |
| Mutual Fund QAAUM | ₹12,60,000 Cr | +11% | yoy · Q1FY27 · as of June 30, 2026 vs June 30, 2025 |
| Active QAAUM | ₹8,60,000 Cr | +10% | yoy · Q1FY27 · as of June 30, 2026 |
| Passive QAAUM | ₹4,00,000 Cr | +12% | yoy · Q1FY27 · as of June 30, 2026 |
| Non-Mutual Fund AUM | ₹16,50,000 Cr | point_in_time · Q1FY27 · as of June 30, 2026 (PMS, advisory, offshore, AIF) | |
| AIF Assets | ₹6,800 Cr | +29% | yoy · Q1FY27 · as of June 30, 2026 |
| Unique Investors | 1.82 Cr | +12% | yoy · Q1FY27 · as of June 30, 2026 vs 1.63 Cr |
| SIP AUM | ₹2,10,000 Cr | +15% | yoy · Q1FY27 · as of June 30, 2026 |
| Monthly SIP Flow | ₹~4,000 Cr | +14% | yoy · Q1FY27 · monthly flow, nearly ₹4,000 Cr |
Guidance
Management expects continued improvement in yield from asset mix shift towards higher-yielding equity and hybrid funds, but declined to provide specific financial guidance due to silent period.
What management committed to
- We will launch our second SIF strategy, positioned in the Ex-Top 100 long-short category, in this quarter [Q2FY27]. — Q2FY27
- We are launching the SBI Balanced Hybrid Fund to complete our hybrid suite.
- This quarter [Q2FY27] we will be launching one more product in that category [alternative assets]. — Q2FY27
- The trend of asset mix shift from low-yielding passive to high-yielding active/hybrid [increasing overall yield] will continue.
- We will continue to improve our cost-to-income ratio. — FY27
- We will continue to pay dividends as per the new dividend policy [uploaded on website]. — FY27
Key themes
SIP growth and margin resilience amidst regulatory change
How the narrative shifted
- SIP-led retail AUM growth: SIP inflows remain resilient even amid market volatility, with record new SIP adds and expanding B30 penetration driving durable fee streams.
- Asset mix shift improving yield: A deliberate rotation from low-yield passive (EPFO) to higher-yield active equity/hybrid has boosted overall yield by 2 bps, a trend management expects to sustain.
- Cost discipline and digital efficiency: With 94% digital transactions and tight opex management, the company runs a lean cost-to-income ratio, allowing it to invest in technology and talent while expanding margins.
- Regulatory navigation without margin disruption: The shift to base expense ratio and exit load removal was managed by passing most of the cut to distributors via dynamic TER %, keeping the AMC net neutral/positive.
- Scaling alternate assets: AIF, PMS, SIF and offshore mandates are growing from a small base with a focus on higher-fee products, though contribution to revenue is still minor (~8-10%).
- B30 and SBI distribution dominance: 65% of SIP contributions originate from B30 locations, underpinned by SBI's 23,000+ branches and deep rural reach, creating a structural moat in retail asset gathering.
Operational commentary
- Overall mutual fund QAAUM market share held at 15.1%, led by active equity/hybrid and passive ETF leadership.
- Asset mix improved markedly: high-yielding active equity/hybrid replaced low-yield passive, boosting total yield by 2 bps.
- Successfully navigated TER regulation: majority of fee reduction passed to distributors, resulting in net neutral/positive impact on margins, with no disruption to distribution.
- SIP flow remained robust: monthly SIP at ~₹4,000 Cr (+14% YoY), live SIPs at 16 million, 1.7 million new SIPs added in Q1.
- Alternate business scaling: non-MF AUM reached ₹16.5 trillion; AIF assets ₹6,800 Cr +29% YoY; new SIF and AIF products launching in Q2.
- B30 market share leadership at 19% QAAUM; 65% of SIP contributions from Tier-2/3 cities, leveraging SBI's 23,000+ branch network.
- Cost-to-income ratio maintained tight; 94% digital transactions driving operational efficiency.
- Distribution franchise: 124,000 IFAs, 10,000 NDs, 90+ banking partners; YONO integration adding digital channel with 12 crore reach.
Analyst Q&A
Q. How much are we projecting the QAAUM growth this year?
We are in a silent period, any guidance we may not give you now.
Q. Can you explain how the TER reduction impact has been passed to distributors and the margin impact?
We have navigated it efficiently; majority of reduction passed on, we are net neutral or positive, no negative impact. The operating margin improvement is from asset mix shift, not from retaining TER.
Q. What is the ESOP cost for FY27?
We have a board-approved policy, but I can't give you details now, maybe one-to-one.
Q. What is the vintage of equity accounts (3-year, 5-year)?
We don't publish that data. It's internal to us.
Research and educational content only. Not investment advice.