SBI Funds Management Q2 Profit Falls 6% to ₹701 Crore as Revenue Rises 9%

Key Takeaways

• SBI Funds Management’s consolidated Q2 profit declined 6% year-on-year to ₹701.2 crore.
• Revenue increased 8.9% to ₹1,192.7 crore from ₹1,095.1 crore a year earlier.
• Sequentially, net profit fell 20.3%, while revenue increased 3.4%.

SBI Funds Management reported a decline in quarterly profit despite higher revenue during the second quarter of FY27.

Consolidated net profit stood at ₹701.2 crore, down 6% from ₹745.9 crore in the corresponding quarter a year earlier. Revenue increased 8.9% year-on-year to ₹1,192.7 crore, compared with ₹1,095.1 crore.

The sequential comparison showed greater pressure on earnings.

Revenue increased 3.4% from the preceding quarter, while net profit declined 20.3% quarter-on-quarter. Earnings before interest, tax, depreciation and amortisation were reported at ₹913 crore, down 1.2% sequentially. The EBITDA margin narrowed to 77% from 80.1%.

SBI Funds Management is one of India's largest asset management companies and operates across mutual funds and other investment-management businesses.

The company continued to see growth in assets during the quarter. Its mutual fund quarterly average assets under management were reported at around ₹13.1 trillion, reflecting roughly 4% sequential growth.

Higher operating expenses weighed on profitability during the quarter. Investments in talent, technology and the company's alternatives business contributed to the rise in costs.

The results drew a negative reaction in the stock market. SBI Funds Management shares fell nearly 5% during trading on October 26 after investors assessed the profit decline against the growth in revenue.

Quarterly earnings for an asset manager can be influenced by several factors, including changes in assets under management, the mix between equity, debt and passive products, fee yields, employee expenses and investment income.

For SBI Funds Management, the September quarter showed continued revenue and asset growth but weaker profitability compared with both the previous year and the immediately preceding quarter.