Q1 26/27

Aug 3, 2026

Summary

Q1 FY27 QAAUM reached ₹12.6tn, up 11% YoY; operating revenue rose 15% and PAT rose 37% QoQ. SIP growth, distribution reach and planned expansion in alternatives and digital capabilities were key themes.

Ladies and gentlemen, good day, and welcome to the SBI Funds Management Limited Q1 FY 2027 earnings conference call. On the call we have with us today, Mr. Debasish Mishra, Managing Director and CEO. Mr. D.P. Singh, Joint CEO. Mr. Srinivas Jain, Chief of Strategy, Digital and Technology, and Head Investor Relations. Mr. Inderjeet Ghuliani, Chief Financial Officer. Ms. Vinaya Datar, Chief Compliance Officer, Company Secretary, and Head Legal. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Debasish Mishra, Managing Director and CEO. Thank you, and over to you, sir. Namaskar. Very good evening to everyone. Before I move into the quarter's highlights, I want to take a moment to thank all our investors for their enthusiastic participation in our IPO and for the trust you have placed in our organization. This is our first earnings call following our listing, and it's a significant moment for us. We are committed to building on this foundation with continued transparency, disciplined execution, and regular engagement with all our stakeholders. Let me begin with a brief view of the macro environment. The quarter is characterized by a steady domestic economic momentum, healthy corporate earnings, and constructive equity market conditions, even as global markets witnessed intermittent volatility in interest rates, liquidity, and commodities. Despite this external fluctuation, Indian household savings continued their structural shift towards financial assets, supporting stable participation across investment categories. Turning to our industry, mutual fund QAAUM, that is quarterly average assets under management, grew around 15% year-on-year and remained broadly stable sequentially, driven by market strength and sustained retail flows. Equity-oriented assets saw a strong YoY expansion with notable outperformance in small and mid-cap segments during the quarter. Whereas, large caps delivered more moderate gains. Monthly SIP inflows remained resilient at over INR 31,000 crores, signaling durable investor behavior through market cycles. Debt assets moderated due to institutional redemption patterns and tight short-term liquidity. While passive products continued to expand meaningfully as ETFs and index funds gained acceptance among both institutional and retail investors. Overall, industry flows remained constructive despite short-term volatility across categories. I'll now come to SBI Funds Management performance. Our company continued to strengthen its leadership position. Mutual fund QAAUM for the quarter stood at INR 12.6 trillion, registering YoY growth of 11%, compared to INR 11.4 trillion in the same quarter last year. Our market share, based on the overall QAAUM, stood at 15.1%. Active QAAUM increased by INR 8.6 trillion, up 10% year-on-year, and a robust CAGR of 21%, supported by consistent performance and healthy flows. Passive QAAUM rose to INR 4 trillion, up to 12% year-on-year, reinforcing our leadership in the segment. Our alternate business continued to scale with total non-mutual fund AUM comprising PMS, advisory, offshore, and AIF assets reaching INR 16.5 trillion. Our AIF assets stood at INR 6,800 crores, making 29% year-on-year increase. Offshore funds contributed approximately INR 45,000 crores in the overall AUM. Gross margins across equity, debt, liquidity, and passive strategies remained stable during the quarter, while net margins have improved at overall level despite change in regulation around transition to the base expense ratio and removal of exit load structure. We continue to manage these regulatory changes prudently to preserve long-term margin resilience. Our unique investor count expanded by 12% to 1.82 crore as on June 30, 2026, compared to 1.63 crore as on June 30, 2025. SIP AUM increased by INR 2.1 trillion, reflecting 15% YoY growth, and monthly SIPs grew by 14% to nearly INR 4,000 crores. Our distribution franchise continued to be different, supported by over 23,000-plus SBI branches, 124,000 independent financial advisors, nearly 10,000 national distributors, and over 90 banking partners, including State Bank of India, which has enabled us to reach investors over 98% PIN codes across the country. We continue to remain market leader in B30 locations with an AUM market share of 19%. Our strong presence in Tier 2, Tier 3 markets is clearly reflected in our robust B30 market share, with nearly 65% of SIP contribution originating from these markets, underscoring our deepening penetration and commitment to democratizing savings across the country. I will list a few new product launches. We have a robust product pipeline across mutual fund, SIF, PMS, and AIF, with a strong focus on differentiated investor-centric solutions. We are further strengthening our SIF offering and will launch our second strategy this quarter, positioned to ex-top 100 long-short category. Last quarter, we introduced six new strategies, and we currently have an NFO underway, that is SBI Nifty Midcap 150 Momentum 50 ETF FOF. To complete our hybrid suite, we are also launching the SBI Balanced Hybrid Fund. We continue to enhance our product platform across active, passive, and alternate strategies with meaningful progress in AIF, PMS, and SIF capabilities alongside steady expansion of our international business to GIFT City and offshore mandates. These capabilities position us strongly to capture rising domestic and global interest in India-focused strategies. I will give a few lines on the technology and AI. These are continued to improve our customer experience, productivity, strengthen distributor enablement, and enhance investment management capabilities. For investors, our AI-driven tools offer personalized nudge, easier onboarding, and intuitive digital journeys. Our success of AI in our InvesTap app, next mobile app now, about 50,000 distributors now use our partner app and portal for advanced analytics, real-time reporting and customer insights also. Around 94% of the investor transactions are processed digitally through our secure hybrid cloud infrastructure. We are also enhancing our in-house research platform, Neo, by integrating AI capabilities, strengthen investment management, and performance workflows. Coming to the financial performance, our operating revenue for the quarter stood at INR 1,149 crores compared to INR 997 crore a year, 15% YoY growth. Operating profits stood at INR 907 crores, registering a healthy growth of 17% profit after tax, which stood at INR 873 crores, registering 37% growth quarter on quarter basis. Our net worth remains strong, allowing us to invest strategically in scale, capability enhancement, and long-term value creation. To conclude, our strategy will be guided by four core pillars: democratizing wealth creation, accelerating digital delivery, strengthening investor performance, and building new growth engines. With this focused agenda, we remain committed to delivering consistent outcomes for our investors, deepening our industry leadership, and building a resilient, technology-led, and future-ready asset management franchise. Thank you once again for joining us. We now look forward to your participation and questions. Thank you. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Prayesh Jain with Motilal Oswal Financial Services Limited. Please go ahead. Hi, good evening, everyone. Congrats on a very good set of numbers. Sir, first question is on the bank, SBI, State Bank of India. What kind of penetration we have there? How have we scaled up, and what's the further room for growth here? That would be our first question. Second question would be on how are you developing your alternate business and how do you think that will grow in the future? Third question would be, you've done phenomenally well on the cost front, where your yields are, the cost as a basis points of AUM is significantly lower in spite of the fact that we have a significant portion coming in from the ETFs and even that of the ETF AUM. In spite of that, we have a very good cost as a basis point of AUM. So what's the view there? How do we do that, and how do you think about this for the future? Those would be my three questions. Thank you so much, sir. Yeah. I think on the SBI side, you can answer. SBI penetration, as you've asked rightly, it is our largest distribution franchise. We have now, with YONO, with around 12 crore customers in our reach and who have been regularly engaging with us. We gave some guidance during the IPO, and the NISM-certified bank compliance has gone up to 15,700. We are now available at 98.2% PIN codes, and that is only through SBI's franchising. SBI has been supporting us in distribution network, reach, and more so in Tier 2, Tier 3 cities, where our market share is very good. Thank you. I think on the question on alternatives, like you saw the numbers, while it's early days for us and we've just started our alternate journey very recently in terms of new business. We have grown from INR 5,300 crore to INR 6,800 crore in the last one year. This is of course, very small compared to our operation. But we have huge ambition plans to grow this particular business. We have started hiring resources now. This quarter we'll be launching one more product in that category. I think the alternative is a very large focus area for us, and we'll continue to invest and we'll continue to update you on the progress that's there. On the last part about the cost-to-income ratio, I think you've been right. We have actually done a very good job of managing costs when it comes to the operation. During the IPO also in our roadshows, we've been talking about our cost disciplines. Both on QoQ and YoY, we've actually shown a very good cost management capability. The reason, clearly, is in our ability to not only scale business but also to manage cost, whether it's a question of operations or whether it's a question of optimizing our overall distribution and other models. We continue to operate on a very tight operating ratio. Yeah. Just a couple of follow-ups. Firstly, on the SBI YONO channel, how long have we been working with the YONO channel? Is it very recent, or we've been working on it for a long time? Second follow-up was on cost, where what kind of cost growth should we think about on an annual basis in terms of employee cost and OpEx? What should we think about it from an annual perspective? Coming to SBI YONO, we have been involved from the YONO launch, which happened somewhere in December, January of 2026. It is now, you can see your mutual fund folios, transactions, everything there. Also SIP can be created directly from YONO to the mutual fund. The two-way compatibility is already given. In fact, I must tell you, in the last IPO, around more than 2.5 lakh YONO users supplied through the platform only directly, in addition to other channels. YONO has been our major digital delivery distribution present. It will also merge and enlarge in future when we have KYC 2.0 coming into place. Coming to your cost and OpEx part. Our major cost reduction has become a digital transaction model. As you have heard, 94% transactions are digital. The cost reduction is in this kind of digitization process. OpEx, I may not give a guidance because this is silent period for guidance part, but I must say, our OpEx will be mostly focused on technology and the human resources. Quality and quality of manpower, quality of the fund managers, quality of our people will be more on the focus along with technology upgradation in AI, in digital and other areas. Thank you. Thank you so much, sir, and wish you all the best. Thanks to you. Thank you. Thank you. Our next question comes from the line of Mahek with Emkay Global. Please go ahead. Yeah. Hi. Thank you for the opportunity. I have a couple of questions. Firstly on the TER impact. With the change in the regulation, can you just help us understand if you have largely passed on the impact to the distributors, and how are you planning to take it forward? Second would be, B30 as a market remains quite under-penetrated, and of course, competition has been changing for the market share in these B30 markets. In this context, you remain a market leader. Could you just qualitatively help us understand how do you plan to maintain and sustain this market leadership and even further increase this market leadership? That would be my two questions. Yeah. As well as TER is concerned, I am very happy to inform you that we have been able to navigate this reduction in the TER in a very efficient manner. That is evident from the fact that the operating profit has grown, and majority of the reduction which has happened has been passed on to the distributors in a very calibrated manner, so that they also don't feel a pinch. We also get the desired benefit. The end result of the whole navigation is that we are net neutral or positive. The passing, we didn't have any negative impact on that. That has already been done from the month of April itself, and we are very confident that we will continue to do that, because in majority of the cases, the distribution channel is getting as a percentage of the TER with increase or decrease as it happens in a dynamic manner. That's majority, 70%-80% business in that process. So that neither we have any impact today, nor we are likely to have an impact even if we grow from here on, which is likely to be a big number. As I was saying too about the B30 market share, we lead with market share of more than 25% in B30. 65% of the SIP contribution that comes from B30 out of the INR 4,000 crores flow coming to us, more than INR 2,500 crores come from B30 locations. It's very encouraging performance. That is because, as I mentioned before, the distribution network of SBI, which is mostly predominantly present in B30 locations, also we have enlarged our mutual fund distributor network to B30 cities. We are also engaging with other agencies for investor awareness. A long-term strategy of investor awareness and about SIPs, about mutual funds, about investments is regularly done to the B30 locations. If I give a percentage that our B30 market share is- Around 19 19%, 9, 20%, but 60% of customer mix is from B30. Although they contribute 44% of the amount, the number of SIPs coming from B30 is around 60%. New customer addition is also majorly from B30. Yeah. Thank you. Got it, sir. Thank you so much. Thank you. Thank you. The next question is from the line of Swarnab Mukherjee with 361 Capital. Please go ahead. Hi, sir. Thank you for the opportunity, and congratulations on a great set of numbers. Sir, first question is on the operating margin. The improvement that we are seeing in the operating margin. Is the pass on of TER to the distributors the only factor that has driven or anything else to read into that? If you could highlight on that. Second is, if you could help us understand how the yields stack up between different asset classes like equity balanced, debt liquid, ETFs. If you could give us a yield breakup of that would be helpful. And thirdly, sir, also wanted to understand that on the overall revenue, if you could help us, what is the share of the revenue that is coming from mutual fund business and on the other businesses, like the alternate side. If you could give some color, that would be helpful. Yeah. Lastly, sir. Yeah. Sir, one more question. On the SIP flows. SIP flows, I just wanted to understand that we have seen a strong scale-up over the last one year. However, from March to June, the number has been, I think there has been a slight, very marginal drop. Just wanted to understand, given that I think in industry level also, the numbers were relatively flattish, would we expect to move in line with industry, or is there any levers we are pressing to gain market share there? Yes, sir. These were my questions. Thanks. I will take, you have got three, four questions. I will take one by one. As far as TER is concerned, that linkage of TER impact and increase of the operating margin is definitely not there. We have not used the opportunity of reduction of TER to make the higher profits. What I am saying is, either we are absolutely neutral or little positive, maybe very little, but more or less, whatever has impact was there, that has been passed on to distributors. So it is neutral only. Imagine why it has increased. It increased because of the asset mix. If you look at it, the concentration on the passive assets, which are very low yielding, has come down by default, and that has been replaced by the high-yielding asset of equity and hybrid funds. You would have seen that has increased our yield by 2 basis points. And this is a trend which has started, and it will continue. Because of the very high concentration on passive funds, we were making 102 basis points. When the concentration come down, it is not that it is come down, but we have not been able to replace that. We have replaced that with the high-yielding assets. That has been a very good success story for us, and thereby increasing our margin on the total stock basis by 2 basis points, which is a very good number for this. As far as operating margin is concerned, I think the efficiencies which we have brought in is result of that. Now, the yields stack, definitely, as you are aware, on the equity side, we are aligned. We are having the yield, which have been shown there. Even on the funds like, when we talk about the arbitrage fund, which has been replacement of liquid fund. The arbitrage fund yield is around 30 basis points, whereas the liquid, it is around 11 basis points. When you move liquid assets into arbitrage fund assets, that is something which is very big. So this clearly shows that the movement of assets for low-yielding asset to high-yielding assets has resulted into this. Also, the equity continues to be strong at 62 basis points. 62 basis point, yeah. Last year. One other unique thing is, there has been a significant growth in gold and silver ETF. Even though we treat them as ETF, that is actually a high-margin product for us. There we make about 44, 45 basis point interest. Overall, the growth has actually been higher because of the asset mix and the yield offtake has come because of that. Now, coming back to SIP question. SIP, I will just give one figure. Fresh SIPs added in the last quarter is 17 million by us. So the live SIP account has gone to now 16 million. 1.7 million. Sorry, 1.7 million trace we've added. Live SIP gone to 16 million. SIP story has been a very success story for the whole country. In fact, as I mentioned before, almost INR 4,000 crores, which was coming in the last quarter, month-wise, it's also maintained. Slightly flattish because of the market volatility and geopolitical conditions. But we are maintaining that flow and the number of addition in last quarter, 1.7 million, is very huge number for us and gives a lot of strength to believe that SIP story is really coming up. Yeah. Next question. Thank you. Understood, sir. Yeah. Very helpful. Thank you so much, and all the best. Thank you. Thank you. The next question is from the line of Madhukar Ladha with J.P. Morgan. Please go ahead. Hi, sir. Congratulations on a good set of numbers. Most of my questions have been answered. Just on your distribution network slide. If you look at equity, SBI contributes 27% to the AUM, but when we look at it on an overall AUM, SBI's contribution increases to 58%. So I wanted to understand what is driving this phenomenon, which segments is where SBI as a bank is getting us this large AUM share. If you could explain that. I think you are reading this slide a little differently, Madhukar. SBI contributes 20% of our overall AUM as a part of the distribution. But in the active equity, their contribute is about 35%. So that means the retail part of it, adjusted to all the passives and institutional money, SBI contributes 30%. I do not know where that- 58% is the direct money. Yeah. Is not SBI. Yeah, that's true. Oh, the color. Sorry, the color. Yeah. No, I thought the- It's a color issue, but 35% is what they contribute in when it comes to active equity. But overall equity, SBI is about 20%. Overall AUM is about 20% for us. Understood. Thank you. Okay. Yeah. That's correct. Okay, thanks. Bye. Thank you. The next question is from the line of Lalit Mohindav with Equirus Securities. Please go ahead. Yeah. Hi, sir. Congratulations on the good set of numbers. Sir, just one question. Coming back to on SIP, on the distribution side, while we have mentioned that around 35% of our equity AUM is coming from the State Bank of India and 27% from direct, could you also give a similar, qualitatively, could you give a similar breakup of the distribution mix on the SIP side, like how much would be coming from the State Bank of India and direct channels, and how it has shaped over the last one or two years? Yeah, I'll do that. See, it's same percentage actually. When we are saying 35%, the SIP is 33%. Out of INR 4,000 crore, which has been talked about, INR 1,300 odd crore coming from SBI channel, and remaining INR 2,700 crore is coming from other channel and direct business. That is number one which we are talking about. All other put together is like the same. But going forward, as the trajectory is coming, I think we have lot of market-making capabilities due to State Bank association, and this number will grow manifold. But our endeavor is to keep it at 35% and have the equivalent number, mean, 35% from SBI channel and remaining 65% from direct and other channel by using our digital tools, digital delivery, which is one of the main areas of our consideration to go forward. So it will continue to remain the same percentage. Today, it is one-third, two-third. One-third from SBI, two-third from other channels and direct business. Thank you. Sure, sir. And sir, just one data keeping question. Could you divide the revenue between mutual fund and the alternate segment? Yeah. We will do that. See, almost 90% of the revenue, 92% is coming from the mutual fund business. Operating revenue. Operating revenue is coming from the mutual fund business only. But PMS advisory and international is remaining 8%. But endeavor is to increase it further by increasing both sides. We want to have, see, this number is as was discussed earlier. So on the top line, we are very high, but it's a lower remunerative business majority. But we are getting into the high revenue of AIF and PMS products going forward. And that is the point. But as of now, this percentage is what I have explained. Thank you. Sure, sir. Thank you. Thank you. The next question is on the line of Sanju Muraliwala, an individual investor. Please go ahead. Congratulations for your IPO and good set of numbers. I just want to ask what is the positive and negative for this quarter for the company. Sanjiv-ji, because results are declared today, we are in more or less a silent period for any guidance. As you have seen, the most positive factor of last quarter would be our SIP and AUM growth. Despite volatility, our SIP AUM grown by 15% YoY. SIP flow also is 14% to 15%. As I told you, we have added more than 1.6 million, like 16 lakh new SIP in last quarter. These figures indicate the future or maybe it will continue as a constant flow. Yeah, I think very clearly we've built a very strong franchise, which shows off even during volatile period, that we are able to pull off decent set of numbers. Okay. Thank you, sir. Thank you. Thank you. The next question is from the line of Nimish, an individual investor. Please go ahead. Hello, sir. Congratulations for a good set of numbers. Sir, I wanted to know how much are we projecting the QAAUM growth this year. Mr. Nimish, although we could have told you better, but being the silent period, I mean, as I declared today, any guidance we may not give you now. But the history of the last quarter growth of 17% is what you can note down for today. Yeah. And see the growth was there. Thank you. Yes. Thank you, Nimish-ji. Thank you very much. Thank you. The next question is from the line of Shreyas Pimple with Nomura. Please go ahead. Hello. Thank you so much for the opportunity, sir, and congrats on a good set of numbers. I wanted to understand, the employee expense year-on-year has dropped down by 1% in Q1. The salary hikes and increments that we give to our employees, is it happening in 1Q or does it happen in another quarter, 2Q? Can you explain on that a little bit, please? Yeah. Employee expenses and all have been always based on the different guidelines coming up. We have fully implemented the new set of labor codes coming into action. That has a kind of impact on the whole cost. It is not something which first quarter is a little subdued, but our training expenses will come in second quarter, right? It is not something unusual. We will be continuing our cost to income ratio in this margin. Just to add, I think this is largely to do with some- Labor cost. labor cost. New labor code adjustment. Implementation. Implementation adjustments. But employee benefit, there is absolutely no Yeah change in any. We have not made any changes to our No changes. Sure, sir. On the ESOP cost, if you can explain if we have any ESOP plan that is going on, and if it comes up, how much will be the ESOP cost for FY 2027? We have a board-approved ESOP policy, and that is what we follow every year. It is basically internal to the organization, and the standard policy should be followed. It is in line with the industry. We have a- SEBI compliance Yeah, SEBI compliance followed. I can't give you details now. Maybe one to one we can discuss with you, but not in this forum. No, we will. Once any details are available at public, we will announce it for sure. Sure, sir. Last question was on flow share versus AUM share for the company. In Q1, what has been the trend of flows versus AUM share, if you can highlight, please. Those were my questions. Thank you so much. The flow share continues to be in double digit, which was there. As we have position of this as house of hybrids and in the volatile times, the hybrid funds definitely get the higher share. We are happy to note that the flows are more or less in line with our market share. Market share is always dependent upon two factors. One is net sales, which we get, and second is the mark-to-market. We are very happy that the turnaround has happened. The mark-to-market has also improved. Overall, we are in line with the market share. It is around 12%. Different categories are different. Yes, overall, we are in line with our market flow and AUM are absolutely aligned. Understood, sir. Thank you so much, and best of luck for the next quarter. Thank you very much. Yes. Thank you. The next question is on the line of Anuj Kashyap with A3 Capital. Please go ahead. Hello. Am I audible? Yeah. Please go ahead. Sir, in percentage terms, can you tell us the numbers of these, how many accounts, on the equity side, how many accounts are 3 years old or 5 years old in percentage terms? We don't publish that data. It's internal to us. Maybe once we do, we can do it openly for everybody. Right now, we don't publish that data. Okay, sir. And sir, the AIF and PMS business is margin accretive than the equity. I'm right on that? Is more margin accretive than the equity side. That's right. This is more selective, and we can earn more money on that. That is for sure. But this is always, we deal with our partners and we do it in a very partnership spirit, where yes, it's better than this. The regulations are a little more easier in this. But yes, overall, you can say yes, it is more accretive than this. Yes can be. And sir, one last one, sir. Sir, there was a recent article by the SEBI is pondering on to enter the PMS through mutual fund side for the 25 equity firms. Yeah. What is your take on it? We are very bullish on that because that's a very right step and the number of players will increase. And the PMS on the mutual fund scheme is a very right subject, and I think we'll be one of the leaders in that category. We are very bullish on that, and we want to scale it up in a big way. There is two benefits there. One benefit is, of course, we can launch PMS products with mutual funds embedded. Two, of course, we expect a lot of PMS products to have our mutual funds as part of their portfolio. So it's actually a double accretive for us. Thank you, sir. Best of luck for the future and for the good set of numbers. Thank you. Thank you, Anuj. Thank you very much. Thank you. The next question is from the line of Ibrahim Babu, an individual investor. Please go ahead. Hi. Two questions. One on any update on dividend policy. The next question is, we saw the dip in other incomes as compared to last year. So any reason whether the base was higher last year, or what is the exact reason behind it? Yeah. On the dividend, I think we have been fairly consistent. Last year, we had paid a particular dividend. The dividend policy is now uploaded. We will continue to pay as per that, and of course, depending on finance board and AGM approvals on how we will pay. But that dividend policy, what was paid last year was a new policy that we have created and put out there as public institution. Now we will have a clear on dividend. Two, on the part about your Other income other income. What has happened is, as a large asset manager, last year also, there is some mark-to-market impact on the portfolio that we have, and that mark-to-market impact on the portfolio is little bit impacted in our last quarter book, and that is why the other income is a little muted. Yeah. Thank you. Thank you, Ibrahim Babu. Thank you. Thank you, sir. Thank you. We have no further questions, ladies and gentlemen. On behalf of SBI Funds Management Limited, that concludes this conference. Thank you all for joining us. Thank you. Thank you. Thank you. Thanks, everyone. Thank you. Thank you. Thank you all for joining us. You may now disconnect your lines.