SBI Funds Rallies as BofA, HSBC, and Motilal Oswal Issue 'Buy' Ratings with Targets Up to ₹720

SBI Funds Management Limited shares witnessed renewed buying interest, rising nearly 2 percent during Monday's trading session to hover around ₹571.55. Trading close to its initial public offering (IPO) price of ₹574, the newly listed asset management stock received a strong vote of confidence from top-tier brokerage firms. Global and domestic heavyweights—including BofA Securities, HSBC, and Motilal Oswal Financial Services—initiated comprehensive coverage on the company, issuing 'Buy' ratings and projecting potential upside returns ranging from 17 percent to 28 percent.

BofA Securities Sets ₹685 Target, Highlighting Structural Growth

BofA Securities initiated coverage on SBI Funds Management with a 'BUY' rating and a target price of ₹685 per share, representing an upside potential of roughly 21.5 percent from its previous close of ₹563.80.

• Key Growth Drivers: The brokerage emphasized the company's robust distribution network, low-cost platform, and powerful operating leverage.

• Retail Expansion: BofA noted that SBI Funds' strong market footprint in B-30 (beyond top 30 cities) markets positions it exceptionally well to capture the next wave of retail equity inflows in India, alongside expanding margins from alternative asset segments.

HSBC Announces ₹660 Target on Strong Distribution and Yield Management

HSBC also entered the coverage list with a 'Buy' recommendation, assigning a target price of ₹660 per share, which indicates an anticipated upside of approximately 17 percent.

• Mitigating Market Share Pressures: According to HSBC, the company's formidable distribution capabilities act as a natural buffer against asset under management (AUM) market share pressures.

• Earnings Trajectory: The brokerage projects SBI Funds' Earnings Per Share (EPS) to grow at a Compound Annual Growth Rate (CAGR) of about 17 percent between fiscal years 2026 and 2029, driven by better yield management, non-mutual fund AUM growth, and scalable operating leverage.

Motilal Oswal Outlines Bullish ₹720 Target and 28% Upside Potential

Motilal Oswal Financial Services issued the most bullish target among major brokerages, setting a target price of ₹720 per share—implying a 28 percent upside from previous closing levels—while outlining a aggressive bull-case target of ₹850.

• Market Leadership and Under-Penetration: Motilal Oswal characterized SBI Funds as a high-quality asset management franchise that leverages the unmatched parentage and distribution backing of the State Bank of India (SBI) to tap into India's highly under-penetrated mutual fund sector.

• Financial Projections: The brokerage estimates mutual fund AUM to expand at a 13 percent CAGR between FY2026 and FY2028, with revenue and Profit After Tax (PAT) projected to grow at CAGRs of 14 percent and 16 percent, respectively. Additionally, return on equity (ROE) is anticipated to remain exceptionally strong at 51 to 52 percent, with EBITDA margins climbing toward 81 percent.