BofA Securities initiated coverage with a “Buy” rating and a target price of ₹685 per share, implying an upside of around 21.5% from Friday’s closing price of ₹563.80.
The brokerage sees upside for the stock from a combination of structural growth, distribution strength and improving profitability. It said SBI Funds’ leadership in B-30 markets positions it well to benefit from the next leg of retail participation in India’s equity markets.
BofA also highlighted the company’s low-cost platform and strong operating leverage, while expecting blended yields to improve as equity penetration rises and alternative assets scale up.
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HSBC On SBI Funds
HSBC also initiated coverage on SBI Funds with a “Buy” rating and a target price of ₹660, implying an upside of around 17% from Friday’s close.
The brokerage expects SBI Funds’ strong distribution capabilities to help mitigate pressure from market share losses in assets under management (AUM). It also expects improved yield management, a larger non-mutual fund AUM base and operating leverage to strengthen profitability.
HSBC expects SBI Funds’ Earnings Per Share (EPS) to grow at a Compounded Annual Growth Rate (CAGR) of 17% over financial year 2026-2029.
Motilal Oswal Sees 28% Upside
Motilal Oswal Financial Services initiated coverage with a “Buy” rating and a target price of ₹720 per share, implying an upside of around 28% from Friday’s close of ₹563.80.The brokerage described SBI Funds as a high-quality, structurally compounding asset management franchise, supported by its market leadership, SBI-backed distribution network, an underpenetrated mutual fund industry and strong operating leverage.
Motilal Oswal expects the company’s mutual fund AUM to grow at a 13% CAGR over FY26-28, with improving yields and a rising contribution from alternative businesses driving a 14% revenue CAGR.
It expects PAT to grow at around 16% CAGR over the same period, with return on equity projected at 51-52%. The brokerage expects SBI Funds’ EBITDA margin to improve to around 81% by FY28, from 79% in FY26, aided by operating leverage.
Motilal Oswal’s bull case scenario for SBI Funds implies a 51% upside potential from current levels, as it ascribes a price target of ₹850 for the newly listed stock.
SBI Funds share price
Shares of SBI Funds Management rose as much as 2% on Monday and are currently trading around 1.4% higher at ₹571.55. The stock continues to trade around its IPO price of ₹574.
