Buy Aditya Birla Capital; target of Rs 380: Motilal Oswal

Motilal Oswal's research report on Aditya Birla Capital

Aditya Birla Capital’s (ABCAP) 2QFY26 consolidated revenue grew 4% YoY to ~INR124.8b, and consolidated PAT (excl. one-off items in 2QFY25) grew ~3% YoY to ~INR8.55b. Overall lending book (NBFC and Housing) grew 29% YoY/7% QoQ to ~INR1.78t. Total AUM (AMC, Life insurance, and Health insurance) grew ~10% YoY to INR5.5t. Mutual fund quarterly average AUM grew 11% YoY to INR4.25t. Life insurance individual first year premium (FYP) grew ~19% YoY to INR18.8b in 1HFY26, and health insurance GWP grew ~31% YoY to INR28.4b in 1HFY26.

Outlook

We expect a consolidated PAT CAGR of ~25% over FY25-28. The thrust on cross selling, investments in digital, and leveraging ‘One ABC’ should drive healthy profitability, resulting in RoE of ~16% by FY28E. Reiterate BUY with an SoTP (Sep’27E)-based TP of INR380.