Aditya Birla Capital Ltd. share price target

Aditya Birla Capital (ABCAP)’s 1QFY25 consolidated revenue grew 26% YoY to ~INR102b, and consolidated PAT rose 15% YoY to ~INR7.5b.

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.

In Jul’22, as Ms. Vishakha Mulye took charge as MD & CEO, AB Capital Limited (ABCL) reimagined its business model. ABCL has been focusing on building frictionless tech-enabled loan processes and leveraging its group-level ecosystem.

ABCAP delivered a decent performance across its key businesses during
Q4FY24.

Aditya Birla Capital (ABCAP)’s 4QFY24 consolidated revenue grew 32% YoY
to ~INR121b and consolidated PAT increased 33% YoY to ~INR8.1b.

ABCAP shares have delivered a strong performance in the last 3 months,
outdoing the NIFTY50 by 25%.

Aditya Birla Capital’s (ABCL) Q4FY23 earnings reflect acceleration in growth momentum and progressive expansion in NIM trajectory. Overall, consolidated PAT stood at Rs6.1bn, up 35% YoY. RoA of 2.5% / 1.9% in the NBFC / HFC subsidiaries improve visibility on achieving the FY24 guidance ahead of the targeted period.

Aditya Birla Capital’s (ABCL) Q3FY23 earnings reflect acceleration in growth momentum and progressive expansion in NIM trajectory. Overall, consolidated PAT (excluding fair value and stake sale gains) of Rs5.3bn (up 27% YoY) was above our estimate of Rs5.1bn. RoA of 2.4%/ 1.9% in the NBFC/ HFC subsidiaries improve visibility on achieving the FY24 guidance ahead of the targeted period.

Aditya Birla Capital’s (ABCL) Q2FY23 earnings reflected accelerated growth momentum, progressive expansion in NIM trajectory and sustained credit cost.

Aditya Birla Capital Limited (ABCL) is the holding company for the financial services businesses of the Aditya Birla Group. ABCL's subsidiaries have a strong presence across Protecting, Investing and Financing solutions. It is a universal financial solutions group catering to diverse needs of its customers across their life cycles. Powered by more than 22,000 employees, the subsidiaries of ABCL have a nationwide reach with 850+ branches and more than 200,000 agents/ channel partners and several bank partners. As of December 31st, 2020, ABCL manages aggregate assets under management around Rs.320,000 crores; has a...

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lower yield and the impact of negative carry, (b) the GNPL ratio was stable at 3.6%, with PCR improving 500bp QoQ to 39%, (c) management expects 50% of GNPL to be recovered/resolved in FY21, (d) the share of retail loans has increased to 19% YoY from 15%, (e) the HFC loan book has been largely flat over the past few quarters at ~INR120b, and (f) NBFC disbursements in July 2020 were close to monthly run-rate levels. The past four to six quarters have been challenging for the company, with the run- down of the loan book and emergence of asset quality stress due to certain large- However, the key monitorable is how this portfolio behaves once it is free of moratorium in September. However, the company has responded by running down the wholesale lending book (especially structured finance, which is high-risk However, the key monitorable is how this portfolio behaves once it is free of moratorium in September.

PAT for NBFCs has plummeted 33%/40% QoQ/YoY to INR1.37b due to (a) loans declining 9%/2% YoY/QoQ to INR470b, and (b) higher credit cost (2.7% v/s 0.5% in 4QFY19), led by COVID related provision of INR1.6b and 90bp QoQ rise in GS3 to 3.6% (+30% to HFC loans were flat QoQ and up 6% YoY to INR121b, AMC AAUM grew 1%/2% QoQ/YoY to INR2.67t; 4QFY20 PAT declined 24% QoQ/YoY to INR1b, impacted by mix change and INR200m MTM loss Life Insurance business reported EV of INR51.9b (+6% YoY)and RoEV of 13.2%. Few mid-large corporate NPLs are under resolution, which are delayed due to FY20 has been a challenging year for the company with slowdown in loan Resolution of some corporate NPLs is underway; however, we do not foresee any meaningful resolutions in the near term given the overall We see significant moderation in business growth and earnings pressure in high profit contributing segments like Lending and the Asset Management business.

PBT grew 46% YoY to INR5.2b in 4QFY19, largely driven by strong profit growth across the lending (NBFC +26% YoY and HFC 3.2x YoY) and AMC (+19% YoY) businesses. Even the insurance business witnessed an improvement in profitability during the quarter. it reported a decline in cost of funds to 8.2% from 8.3% a quarter ago. quality was stable QoQ (ex-IL&FS;), with GNPA% at 1.05%. ABCAP has recognized all four exposures of IL&FS; of INR2.2b as GNPA (44bps of loan book) and the coverage ratio on the same stands at 27%. AAUM grew 6% YoY to INR2.65t; however, equity AAUM increased 21% YoY to INR890b. With the rising share of equity AAUM, PBT to AAUM improved to 29bp in 4Q and 26bp in FY19.