Motilal Oswal's research report on Aditya Birla Capital
Aditya Birla Capital (ABCAP)’s 1QFY25 consolidated revenue grew 26% YoY to ~INR102b, and consolidated PAT rose 15% YoY to ~INR7.5b. The company added ~31 branches in 1QFY25 for a total branch count of 1,505. The NBFC loan book grew ~25% YoY to ~INR1.07t. ABCAP’s 1QFY25 disbursements grew only ~2% YoY to ~INR134b. Loans to the Retail, SME, and HNI customers constituted 66% of the total loan portfolio for 1Q. Asset quality continued to improve, with GS2 + GS3 assets declining ~5bp QoQ to ~4.45%. ABCAP calibrated growth in the small-ticket unsecured loans, where the risk-weights had gone up and the RBI had also expressed concerns. AUM of both the Personal and Consumer (P&C) segment as well as the unsecured business segment declined sequentially.
Outlook
We expect a consolidated PAT CAGR of ~31% over FY24-26E. The thrust on cross-selling, investments in digital, and leveraging ‘One ABC’ will lead to healthy return ratios, even as we build in a consolidated RoE of ~14% in FY26. Reiterate BUY with a revised SoTP (Mar’26E)-based TP of INR270.
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