Aditya Birla Capital Ltd. share price target

Aditya Birla Capital (ABCL), a financial service provider, continued its robust growth in business operation in 4QFY18 as well. The company's consolidated revenue increased by 25%yoy and PAT jumped by 91%yoy to `208cr in said quarter. Consistent growth throughout the year took the company's net profit for the FY18 to `824cr, up by 44%. It..

Loan book grew 9%/25% QoQ/YoY to INR432b. Margins (incl.fees) were under some pressure (-30bp YoY to 4.3%) due to a 70bp YoY decline in yields. Management continues focusing on retail and SME segments, the share of which is currently at 47%. Overall, profitability for the full year was intact, with RoA/RoE at 1.9%/14%. ABCAP recognized 20bp NPLs stemming from the RBI's Feb 12th circular, as a result of which, GNPL ratio stands at 92bp.

Indostar Capital Finance Ltd (Indostar) is a non-deposit taking NBFC having major exposure to i) corporate credit, followed by ii) SME, iii) vehicle finance and iv) housing finance. IndoStar has been sponsored by financial institutions such as Everstone Capital, Goldman Sachs Group, Baer Capital Partners, ACPI Investments, and CDIB Capital International Corporation. Strong promoter provides strong capital sponsorship and professional expertise to Indostar. Over the span of 6 years, IndoStar has built its Corporate lending business (76.8% of total credit as on Q3FY18) and has cemented relationships with large corporates. The company had then forayed into the SME segment in 2015 (22.7% of credit as on Q3FY18) and now it...

Research Analyst: Alpesh Mehta (Alpesh.Mehta@MotilalOswal.com); +91 22 3982 5415 | Piran Engineer (Piran.Engineer@MotilalOswal.com); +91 22 3980 4393 Nitin Aggarwal (Nitin.Aggarwal@MotilalOswal.com); +91 22 3982 5540 | Anirvan Sarkar (Anirvan.Sarkar@MotilalOswal.com); +91 22 3982 5505 Investors are advised to refer through important disclosures made at the last page of the Research Report....