Buy SBI Funds Management; target of Rs 590: Motilal Oswal

Moneycontrol • 6 days ago

Original source

Key Investment Pillars

  • SBI Funds Management's mutual fund business remains strong, supported by continued growth in AUM and resilient SIP flows.
  • The company's distribution network, backed by SBI's 23,000 branches, provides a robust platform for growth.
  • Increased investments in technology are expected to enhance productivity and drive cost efficiency.
  • The company's AIF and SIF businesses are growing, with a focus on product expansion and institutional engagement.

Thesis Validation Checklist

  • Watch for continued growth in AUM and SIP flows, as well as expansion of the company's distribution network.
  • Monitor the company's operating expenses and employee costs, as these are expected to remain at current run rates.
  • Track the company's progress in building its AIF and SIF businesses, and the impact of these on revenue and profitability.
  • Keep an eye on the company's valuation, currently at 38x FY28E core P/E, and assess whether this remains reasonable given the company's growth prospects.