Sbi Funds Management Limited · NSE:SBIFUNDS
Sbi Funds Management — Investor Presentation (May 2026)
52 slides from Sbi Funds Management's investor presentation, May 2026
Slide 1: Economy and Markets May 2026
EC E CO ONNO OMMY Y AN A ND D M MAAR RKKE ETTS S May 2026 Investment Team
Slide 2: Middle east conflict triggers a direct shock to global energy supply
Middle east conflict triggers a direct shock to global energy supply Strait of Hormuz: Critical energy chokepoint under stress • Hostilities erupted across West Asia on February 28, 2026, rapidly escalating into a multi-country GCC conflict. • Iran’s move to halt most traffic through the Strait of H
Slide 3: Eight weeks of disruption and counting: Strait of Hormuz remains shut
Eight weeks of disruption and counting: Strait of Hormuz remains shut Strait of Hormuz effectively shut: Pass through of commercial Global supply chains are under stress; Freight costs rise sharply ships nearly zero vs. 100 earlier 3,500 Freight cost (monthly 3,000 average) 2,500 2,000 1,500 1,000 5
Slide 4: Geopolitical risk triggers a sharp rotation across asset classes
Geopolitical risk triggers a sharp rotation across asset classes Tariff uncertainty dominated 2025: Precious Metals Led Returns Geopolitical risk (Middle East war) dominated March-April 2026: Energy led the rally Dow Jones Precious Metals Index 245.8 Brent 60.2 Gold 90.2 BSE Small Cap (local ccy ret
Slide 5: Energy supply shock pushes commodity prices higher
25 65 85 45 5 -35 -15 105 Coffee -6.0 Arabica Coffee -3.4 Platinum -0.5 Tin -0.1 Lead 4.0 Ukraine War) Copper 4.0 Commodity prices Gold 5.0 WTI 6.1 Brent 6.4 % change in 2022 (Russia Source: Bloomberg, SBIFM Research Soybeans 6.4 Silver 7.5 Aluminium 8.4 Sugar 10.0 Palladium 10.6 Malaysian Palm Oil
Slide 6: Stagflationary signals strengthen: Growth projections cut, inflation pushed higher
Stagflationary signals strengthen: Growth projections cut, inflation pushed higher Rising energy costs weigh on growth while inflation risks build Bloomberg expectation For Real GDP for 2026 as on: For CPI inflation for 2026 as on: (% y-o-y) Feb-26 Apr-26 Feb-26 Apr-26 US 2.5 2.2 2.6 3.2 Elevated fu
Slide 7: Energy inflation resets global interest rate expectations
Energy inflation resets global interest rate expectations Market expects majority of the economies to hike interest rates in US Fed rate cuts gets eliminated in 2026 (now no rate cut is priced next six months in for 2026 vs. first rate cut in July 2026 previously) Central bank policy rate Market int
Slide 8: Global financial markets: Traditional hedges break down
Global financial markets: Traditional hedges break down Gold fails to act as a geopolitical hedge; 5% fall since Middle East Bonds struggle as higher oil prices generate an inflationary escalation impulse 10 Year Gsec Yield (% Change since Feb’26 5500 Feb-26 Mar-26 Apr-26 mth end) (in bps) 5,020 500
Slide 9: Dollar strength drives broad currency depreciation
Dollar strength drives broad currency depreciation DXY strengthens by ~1% since Middle East crisis Majority of developed and emerging market currencies depreciate 6 % change since Middle Emerging Developed 114 3.7 East Crisis economies economies 2.6 2.3 4 0.5 0.4 2 0.1 110 0 -2 -1.0 -1.1 -1.7 106 -1
Slide 10: India Growth outlook: Expectations moderate
India Growth outlook: Expectations moderate Real growth could moderate in FY27 while nominal growth could • Real GDP growth is expected to moderate from ~7.8% y-o-y in likely improve driven by higher WPI inflation FY26 to ~6.5% in FY27, even as nominal GDP accelerates to 12– 13%, driven by higher WP
Slide 11: India macro gets impacted with energy shock from the Iran war
India macro gets impacted with energy shock from the Iran war Indian crude basket jumped from US$ 69/bbl in Feb’26 to US$ 113/bbl by March 2026 112 108 113 114 106 120 93 100 85 84 83 79 79 71 70 70 80 69 60 • Owing to higher freight costs and rupee depreciation, crude prices 56 60 48 in rupee terms
Slide 12: Raw material inflation rises in India
Raw material inflation rises in India : could translate into price hikes in final goods WPI inflation jumped from 2.1% y-o-y in Feb’26 to 3.9% in Mar’26 Input inflation saw a 9X jump from 0.5% to 4.7% while output driven largely by energy linked inputs inflation trend is broadly unchanged at 3.9% 13
Slide 13: Government and industry absorb costs: limited retail inflation rise thus far
Government and industry absorb costs : limited retail inflation rise thus far CPI Inflation remains anchored by stable food prices; only Petrol and diesel prices have stayed largely unchanged in India airfares, LPG, and kerosene reflect energy shock since May 2022 despite crude price volatility 130
Slide 14: India High frequency data heatmap (1/2)
India High frequency data heatmap (1/2) Bank credit, and consumption-oriented data holds up (corporate wage, auto sales, tractor sales, consumer sentiment); core industry output declines %y-o-y Jan-00 FY24 FY25 1HFY26 Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 GST collections (Rs. Billion) 11.7 9.4 9
Slide 15: India's growth shows a mixed picture
India’s growth shows a mixed picture External sector takes a hit; Wholesale price inflation see a rise %y-o-y Jan-00 FY24 FY25 1HFY26 Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Centre Revex ex Interest Payment (Rs. Tn) -3.8 2.3 -3.1 -17.3 18.8 -5.5 -10.7 -0.4 na Centre Capital expenditure (Rs. Tn) 28
Slide 16: Demand driven indicators continue to show resilience
Demand driven indicators continue to show resilience Credit growth accelerates, led by industrial and MSME lending GST trends indicate sustained domestic activity % 35 % y-o-y Share FY25 May-25 Dec-25 Jan-26 Feb-26 30.8 Bank Credit 100.0 11.0 9.0 14.5 14.5 15.4 30 Non-Food Credit 99.8 11.0 8.8 14.4
Slide 17: High-Frequency demand indicators remain resilient
High-Frequency demand indicators remain resilient Non-Oil, Non-Gold imports remain elevated, signalling strong Auto sales numbers have been strong domestic demand 46 50 35 29 30 FY26 (%y-o-y) 34 40 25 27 27 30 20 17 20 14 16 17 20 15 10 8 11 10 7 10 8 5 5 5 10 6 1 0 0 -5 0 -1 -10 -4 -2 -3 -4 -10 -6
Slide 18: Output disruptions are visible in energy intensive sectors
Output disruptions are visible in energy intensive sectors Core industries output was visibly impacted Electricity 4.6 -0.5 % y-o-y Cement 11.3 4.0 Steel 9.7 2.2 -24.6 3.8 Fertilisers • Energy intensive sectors like fertilizers, steel, cement, and Refinery products -0.7 0.1 chemicals have seen outpu
Slide 19: Business sentiment moderates; While consumer sentiment stays upbeat
Business sentiment moderates; While consumer sentiment stays upbeat Business manufacturing and services sentiment softens on Consumer confidence at a multi-year high amid contained higher input costs inflation and resumption of credit availability 65 140 60 121 120 107 55 100 84 91 50 80 83 68 45 60
Slide 20: Geopolitical disruption hits India's exports to the Middle East
Geopolitical disruption hits India’s exports to the Middle East Exports to West Asia see a sudden and sharp decline Middle East share in India’s exports contracts sharply 65 63 63 63 70 25 59 57 57 20 52 60 18 18 18 50 18 49 17 48 48 20 46 15 15 15 15 50 15 14 14 14 12 33 40 15 11 30 10 6 20 5 6 6 1
Slide 21: India's external account is under stress
India’s external account is under stress India’s Net FDI has dropped to US$ 1bn in FY25 and FY26 Net capital inflows at risk of turning negative in FY27 for the first time since 1974 50 43 44 10 36 39 40 36 8 31 30 31 28 30 22 6 20 22 20 10 4 10 6 1 2 - FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 F
Slide 22: Rupee is on a weaker footing
Rupee is on a weaker footing Rupee REER is at 90.6 thus ~11% below its fair value In last one year, rupee has depreciated by 7% against dollar, 15% against Euro, 16.5% against RMB, 11% against GBP 115 5.0 +ve % appreciation in Rupee/ -ve is % 2.7 110 2015-16=100 depreciation in Rupee 1.7 0.1 0.0 105
Slide 23: Energy shock reshapes sectoral earnings and profitability
Energy shock reshapes sectoral earnings and profitability • Energy: Oil marketing firms will be materially impacted through losses on higher crude oil purchases, MTM losses on energy price volatility, higher shipping & insurance costs. There will be an balance sheet impact as well through a need for
Slide 24: Energy shock reshapes sectoral earnings and profitability
Energy shock reshapes sectoral earnings and profitability • Hotels & Restaurants: Higher costs on constrained fuel supplies, constrained demand on higher costs / lower tourism. • Automotive: Cost inflation on components and parts, potential shift in demand towards alternative fuel vehicles (towards
Slide 25: Equity Market
EQUITY MARKET MANAGEMENT LIMITED
Slide 26: Performance in April 2026 across global markets
10 15 20 25 30 35 0 5 -5 10 15 20 25 35 30 40 0 5 -10 -5 INDONESIA -3.5 PHILIPPINES -1.9 PHILIPPINES -3.3 BRAZIL -1.4 BRAZIL 2.3 INDONESIA -1.3 UK 3.5 UK 1.4 FRANCE 4.0 FRANCE 2.6 HANG SENG 4.1 HANG SENG 4.0 Source: Bloomberg, SBIFM Research % m-o-m (US$ returns) DOW JONES 5.4 DOW JONES 5.4 % m-o-m
Slide 27: Indian equity market snapshot: April 2026
Indian equity market snapshot: April 2026 Indian equity market performance in April 2026 (local currency YTD performance (local currency returns) returns 21.4 22.2 25 20.2 25.4 20.1 % m-o-m 30 15.05 % change Year-to-date 14.6 20 14.8 14.6 20 13.6 12.6 12.3 6.4 11.4 15 1.9 10 10.4 0.8 9.7 9.1 8.7 8.5
Slide 28: Liquidity: FIIs turn net sellers in March and April 2026
Liquidity: FIIs turn net sellers in March and April 2026 after nascent signs of recovery in February FIIs see outflows in March and April 2026 DIIs support to Indian equity market 90 40 100 29 90 25 23 30 21 80 20 19 63 18 16 70 14 20 11 60 3.8 9 8 1.7 8 7 50 36 10 3 3 3 2 1 40 1 22 0 30 17 16 15 13
Slide 29: Monthly SIP inflow and mutual fund flows
50 0 150 200 250 300 100 350 -1,000 0 1,000 2,000 3,000 5,000 6,000 4,000 FY21 80 FY21-169 FY22 104 2,880 FY22 FY23 130 FY23 3,029 FY24 166 FY24 2,500 FY25 241 FY25 5,586 FY26 291 FY26 5,029 Apr-25 266 Apr-25 446 May-25 267 May-25 250 Jun-25 273 Jun-25 275 Jul-25 285 Jul-25 532 Aug-25 283 Aug-25 443
Slide 30: NIFTY PAT growth continues to be weak
10 30 40 20 50 0 -20 -10 20 40 60 80 0 -40 -20 100 120 Sep-14 6 Sep-14 5 2 -6 Mar-15 -5 Mar-15 -12 5 -2 Sep-15 1 Sep-15 0 5 -7 Mar-16 15 Mar-16 1 8 -3 Sep-16 11 Sep-16 -3 9 7 Mar-17 3 Mar-17 7 -7 -6 Sep-17 18 Sep-17 15 13 14 Mar-18 20 Mar-18 5 31 10 Sep-18 13 Sep-18 9 5 5 Mar-19 6 Mar-19 15 3 3 Sep-
Slide 31: Earnings revisions fell in April
Earnings revisions fell in April Earnings Upgrades to downgrades ratio continued to fall in April In FY26, EPS projection sees a downgrade 90% Earnings upgrade -6.8 FY26 80% -3.3 FY25 downgrade- % chg 70% -1.3 FY24 60% -4.9 FY23 50% 1.5 FY22 40% -2.4 FY21 -23.4 FY20 30% -12.6 FY19 20% -9.7 FY18 10%
Slide 32: Earnings projections ~9% in FY26: FY27 projections could see downgrades
Earnings projections ~9% in FY26: FY27 projections could see downgrades Earnings expected to recover in FY27 Sectoral breakup of NIFTY earnings outlook EPS Change No. of FY2 FY21- FY22- FY23- FY24- FY25- FY26- FY27- FY25-28 1,273 1,400 40 1,075 1,059 1,011 1,200 Cos. 0-21 22 23 24 25 26 27 28 (CAGR)
Slide 33: Equity valuations revert to moderately expensive levels
Equity valuations revert to moderately expensive levels Sensex trailing PE ratio stood at 21.6 in Apr’26 vs. 20.8 in Mar’26 Earnings yield to bond yield spread has widened 34.0 Current : 21.6 4.0% Current : -2.38% 30.0 Average : 20.4 2.0% Average : -2.18% Percentile : 56% Percentile : 38% 26.0 0.0%
Slide 34: Polarization remains low, remains favorable towards large caps
Polarization remains low, remains favorable towards large caps Market capitalization/GDP expensive vs. history at 96th percentile Mid caps and small caps: Market polarization remains favourable reading towards large caps 200 Current: 136 57% Current : 38.4% 55% Average : 47.4% Average: 80 53% 150 Pe
Slide 35: Equity market sentiment goes up
Equity market sentiment goes up Equity sentiment back above zero Equity sentiment rises & goes above zero 100% 2.50 Zone of Complacency => 100% Zone of Complacency => SELL SELL 80% 80% 1.50 60% 60% 0.50 40% R² = 0.3198 12m fwd returns 20% 40% -0.50 0% 20% -20% -1.50 0% Zone of pessimism => -40% -2.0
Slide 36: Equity Outlook: Focus on large caps, bottom-up stock selection
Equity Outlook: Focus on large caps, bottom-up stock selection, and sectors resilient to margin pressure • Indian equities saw an improvement in April 2026 after a sharp correction in March 2026 with both Nifty and Sensex rising by ~7% each month-on-month respectively. • Valuations have corrected me
Slide 37: Fixed Income Market
FIXED INCOME MARKET MANAGEMENT LIMITED
Slide 38: Global Bond Market Snapshot: Global bond yields move higher
Global Bond Market Snapshot: Global bond yields move higher following the Middle East war Rising oil prices stoked inflation fears and pushed yields higher across both developed and emerging economies m-o-m change YTD change 10 Year Gsec Yield (% mth end) 2024 end 2025 end Feb-26 Mar-26 Apr-26 (in b
Slide 39: Rates in India sees an upward movement too
Rates in India sees an upward movement too Interest rates in India have been rising across segment in 2026; This rise is especially visible in money market rates, shorter tenor government securities (G- sec) yields, and corporate bond yields m-o-m YTD change (in Rates (%) 2024 end 2025-end Feb-26 Ma
Slide 40: G-Sec Yields see some relief in April but remain elevated
G-Sec Yields see some relief in April but remain elevated G-Sec yields rallied during Jan-May 2025, but worsened there since post the June 2025 policy (impact of a tight demand supply and weaker rupee) Yield (%) 3 Month 6 month 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 1
Slide 41: Monetary policy expectations change: Slowing growth, higher inflation risks
Monetary policy expectations change: Slowing growth, higher inflation risks Repo rate cut by 125bps cumulatively since February 2025 policy • The Monetary Policy Committee kept the repo rate unchanged at to 5.25% now 5.25% at its latest meeting in April 2026. The stance remains at neutral. 9.0 8.5 8
Slide 42: Simultaneous expansion of private and government credit creates tight demand-supply dynamic
Simultaneous expansion of private and government credit creates tight demand-supply dynamic Visible steepening in G-sec yield curve in the last year Similarly corporate bond yield curve steepens with rising private sector credit 8.00 7.80 India GSec yield (%) 7.50 7.60 7.00 7.40 6.50 7.20 6.00 5.50
Slide 43: Government borrowing from market sources is expanding despite fiscal consolidation
Government borrowing from market sources is expanding despite fiscal consolidation Government on a fiscal consolidation path since FY21.. ..Yet, net govt borrowing from market via dated securities remain elevated 9.4 16 10 13.8 9 14 8 6.3 6.2 6.0 7 5.7 12 5.7 5.5 5.2 5.2 5.1 9.9 6 4.7 9.4 4.6 8.7 10
Slide 44: FY27 States budget target a fiscal consolidation to 3.0%
FY27 States budget target a fiscal consolidation to 3.0% from an estimated 3.6% of GDP in FY26 State fiscal deficit could once again exceed budgeted estimates in ..Implying higher than budgeted SDL supply in FY27 FY27.. 12,383 12,764 13,258 14,000 5.0 16,050 10,714 4.1 All states (INR bn) 10,045 14,
Slide 45: Q1 FY27 gross SDL issuances at 86% of calendar till date
Q1 FY27 gross SDL issuances at 86% of calendar till date Q1 FY27 gross SDL issuances at 86% of calendar till date SDL spreads moderate but above long term average 600 132 123 200 LTA since 2006: 55 bps 10 year avg. 56 bps 500 105 105 105 180 5 year avg. 47 bps 100 103 97 97 Latest:61 (vs. 65bps in M
Slide 46: Durable liquidity remains near Rs.4-5 trillion due to FX outflows
Durable liquidity remains near Rs.4-5 trillion due to FX outflows despite massive liquidity infusion RBI provided massive liquidity support since December 2024 Durable liquidity remains low despite RBI liquidity measures due to increased intervention in FX market and CIC leakage Liquidity management
Slide 47: Indian G-sec: Fundamentals, sentiments and valuation weakens
Indian G-sec: Fundamentals, sentiments and valuation weakens Historically energy price spikes are associated with rate hikes Fixed Income fundamental deteriorates: Rate hikes expected by market 9.50 140 8.50 120 100 7.50 80 6.50 60 5.50 40 4.50 20 3.50 0 Mar-22 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar
Slide 48: Indian G-sec valuations: neutral to marginally unattractive
Indian G-sec valuations: neutral to marginally unattractive G-sec spread vs. equity turns neutral Real rate turns positive 10year avg: 220 bps 800 Latest rank: 61 percentile 350 Latest: 240 bps (vs. 180 bps) 600 260 400 200 170 0 80 -200 -10 -400 -100 -600 May-14 May-12 May-16 Sep-17 May-18 May-20 M
Slide 49: FIIs turn net sellers of Indian government bonds in March and April 2026
FIIs turn net sellers of Indian government bonds in March and April 2026 India witnessed Debt outflows in March and April 2026 FII flows in EM bonds are muted despite healthy inflation adjusted returns; as risk premium vs. DM bonds is largely erased EM FII Debt inflow 10 year G-sec 2024 2025 Feb-26
Slide 50: Debt Outlook: Cautious
Debt Outlook: Cautious • Interest rates in India have moved higher across money markets, G secs, and corporate bonds, with a clear steepening of the yield curve amid simultaneous expansion in private credit and government borrowing, creating a tight demand–supply backdrop for fixed income. • Tight b
Slide 51: Disclaimer
Disclaimer This presentation is for information purposes only and is not an offer to sell or a solicitation to buy any mutual fund units/securities. These views alone are not sufficient and should not be used for the development or implementation of an investment strategy. It should not be construed
Slide 52: Contact Details
Contact Details SBI Funds Management Limited Call: 1800 425 5425 (A joint venture between SBI and AMUNDI) SMS: “SBIMF” to 7065611100 Corporate Office: 9th Floor, Crescenzo, Email: customer.delight@sbimf.com C-38 & 39, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051 Visit us @ www.face
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