ICICI Securities's research report on Aditya Birla Capital
In Jul’22, Ms. Vishakha Mulye took charge as MD & CEO of Aditya Birla Capital Limited (ABCL) and reimagined its business model. In-line with its goal on building frictionless tech-enabled loan processes and leveraging its group-level ecosystem, ABCL invested heavily in its digital platform and expanding the company’s distribution network. This should aid ABFL expand AUM at >25% over FY24–26E and ABFL’s RoA may expand by ~20bps to 2.6–2.7% by FY26E driven by stable NIM, operating leverage and a slight decline in credit cost.
Outlook
We model 33% earnings CAGR over FY24–26E and expect RoE to settle at 15–16% for FY25E–26E for the consolidated entity and therefore maintain BUY on ABCL with an SoTP-based TP of INR 270, valuing ABFL at 2.1x FY26E BV and ABHFL at 1.5x FY26E BV.
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