SBI Funds Management is drawing a broadly positive view from global and domestic brokerages, with Jefferies, HSBC and Motilal Oswal pointing to the company’s distribution strength, improving fund performance and expansion into higher-yielding products as key supports.
Motilal Oswal’s report has initiated coverage with a ‘Buy’ rating and sees SBI Funds Management as a business with several avenues for earnings growth. Jefferies and HSBC have also retained positive calls.
Motilal Oswal on SBI Funds Management: ‘Buy’
Motilal Oswal has set a target price of Rs 720, implying an upside of 28%.
The brokerage describes SBI Funds Management as India’s leading asset manager, with total assets under management of Rs 29.1 lakh crore as of June 2026. This includes Rs 12.6 lakh crore in mutual fund assets, Rs 16.5 lakh crore in PMS and advisory assets and Rs 6,800 crore in AIF assets.
Motilal Oswal expects mutual fund AUM to grow at 13% annually between FY26 and FY28, while revenue is projected to rise at a 14% CAGR. PAT is expected to grow at around 16% over the same period.
“SBIFUNDS is a high-quality, structurally compounding AMC franchise,” Motilal Oswal said.
Jefferies on SBI Funds Management: ‘Buy’
Jefferies has set a target price of Rs 710, implying an upside of 26%.
The brokerage’s case rests heavily on SBI Funds Management’s relationship with State Bank of India, its presence in B30 markets, large scale and diversified scheme portfolio. Jefferies says SBI accounts for 35% of the AMC’s equity AUM, giving it an important distribution advantage compared with other large listed asset managers.
Jefferies also expects improving fund performance to support flows. The brokerage notes that SBI Funds Management had three to four schemes within the top tier during CY25 and CY26, compared with none in CY24.
HSBC on SBI Funds Management: ‘Buy’
HSBC has set a target price of Rs 660, implying an upside of 17.3%.
HSBC’s view centres on a potential recovery in fund performance after SBI Funds Management lost some individual mutual fund market share over the past two years. The brokerage expects stronger scheme performance to help rebuild flows while the company’s distribution capabilities provide support.
“Structurally strong distribution capabilities should mitigate near-term pressure from AUM market share losses,” HSBC said.
SBI network gives the AMC a powerful distribution base
Motilal Oswal says SBI Funds Management can access 23,265 SBI branches, more than 100 million YONO users and over 134,000 distribution partners. The brokerage estimates that less than 2% of SBI’s eligible customer base has been tapped, leaving considerable room to add customers.
Jefferies makes a similar case, noting that SBI contributes 35% of SBI Funds Management’s equity AUM. It also says the average mutual fund AUM per SBI branch remains only 10% of retail deposits per branch.
HSBC estimates that about 38% of SBI Funds Management’s equity and hybrid AUM is sourced through the SBI group ecosystem, including branches and YONO.
B30 cities are becoming an important growth source
Motilal Oswal says SBI Funds Management’s B30 mutual fund AUM stood at Rs 2.8 lakh crore, representing around 23% of its total mutual fund AUM in March 2026.
Jefferies also places considerable weight on B30 exposure. It says B30 markets accounted for 28% of SBI Funds Management’s equity AUM in FY26, with the company’s B30 equity AUM market share at 16%.
SIPs provide visibility to fresh equity flows
SBI Funds Management had 16 million live SIPs and SIP AUM of around Rs 2.1 lakh crore as of June 2026, according to Motilal Oswal. Monthly SIP flows were around Rs 4,000 crore in the first quarter of FY27.
Motilal Oswal expects the equity AUM base to continue expanding, helped by sustained SIP contributions and the company’s reach outside India’s largest cities.
SIF, PMS and AIF businesses add new earnings avenues
Motilal Oswal sees significant potential in SBI Funds Management’s businesses outside conventional mutual funds. The AMC’s AIF AUM had reached Rs 6,800 crore, while the newly launched SIF business had already reached Rs 3,500 crore and a 25.8% market share within a few quarters.
The report says the SIF category can improve yields because these products can carry higher total expense ratios than regular equity schemes. SBI Funds Management is also expanding its retail and corporate PMS offerings alongside its AIF business.
Jefferies similarly sees the alternatives business as a route to reach affluent customers through PMS, AIF and SIF products.
Equity and passive products remain important
Motilal Oswal says equity accounted for about 48% of SBI Funds Management’s mutual fund AUM in June 2026, up from around 30% in FY21. The brokerage expects equity MF AUM to grow at 15% annually through FY28.
The AMC is also India’s largest passive asset manager, with a 27.4% market share and passive QAAUM of around Rs 4 lakh crore, according to the report.
Jefferies notes that the diversified scheme base reduces dependence on a handful of large equity funds. SBI Funds Management’s three biggest equity schemes account for 33% of equity AUM, below several large peers.
Cost efficiency could support profit growth
Motilal Oswal says operating expenses were around 8 basis points of AUM in FY26 and expects this to fall to roughly 7 basis points by FY28. It forecasts an EBITDA margin of about 81% by FY28.
The brokerage expects PAT to rise at around 16% annually between FY26 and FY28, with RoE remaining around 51-52%.
Jefferies also expects SBI Funds Management’s scale to keep its cost growth below that of major peers, supporting operating leverage as the AUM base expands.
India’s mutual fund market still has room to expand
Motilal Oswal points out that India’s mutual fund AUM-to-GDP ratio is around 21%, well below developed markets. The brokerage expects the domestic mutual fund industry’s AUM to grow at around 18% CAGR between FY26 and FY30, reaching about Rs 142 lakh crore.
That broader industry growth gives SBI Funds Management another avenue to expand its asset base, particularly as financial savings move towards mutual funds and other managed products.
What the three brokerages are focusing on
| Brokerage | Main reason behind the positive view |
| Motilal Oswal | SBI distribution reach, B30 penetration, rising equity mix, SIF and alternatives, operating leverage |
| Jefferies | SBI relationship, B30 presence, improving scheme performance, scale and diversified products |
| HSBC | Distribution strength, improving fund performance, equity and hybrid AUM recovery, expansion of non-MF products |
Conclusion
The three brokerage reports point to a common growth story, although each places a different emphasis on it. Motilal Oswal sees several earnings levers working together, Jefferies gives greater weight to SBI’s distribution advantage and improving scheme performance, while HSBC expects fund performance and non-mutual-fund expansion to support the next phase of growth.
Disclaimer
Disclaimer: This article is based on the Motilal Oswal, Jefferies and HSBC research reports cited above. Ratings, target prices, estimates and brokerage views are subject to change and aren’t guarantees of future performance. This article is for informational purposes only and shouldn’t be treated as investment advice or a recommendation to buy or sell any security. Readers should conduct their own research and consult a SEBI-registered investment adviser before making any investment decision.