Target: ₹415
CMP: ₹369.25
Aditya Birla Capital (standalone)’s Q4 PAT rose 19 per cent yoy to ₹780 crore, in line with estimates. Higher-than-expected opex (cost-to-income at 35 per cent vs 33 per cent MQe) was offset by lower credit costs (1 per cent vs 1.2 per cent expected). RoA improved 6 bps q-o-q to 2.3 per cent.
AUM growth was healthy at 27 per cent, driven by personal loans (+38 per cent) and unsecured business loans (+47 per cent). Credit cost fell 19 bps q-o-q to a five-year low of 1 per cent, supported by a broad-based 20-bps q-o-q decline in GNPA. The management expects credit costs to remain range-bound despite higher unsecured exposure, aided by a largely collateral-backed portfolio (about 72 per cent of the book) and limited impact from the West Asia conflict to date.
NIM fell 4 bps quarter on quarter due to competitive pressure and MTM losses, but should recover as personal and unsecured loans (about 23 per cent of the book) scale-up and a 2-3 per cent rise in mix should drive a 25-30 bps margin uplift over the next few quarters, supporting a RoA target of 2.5 per cent by FY27-end.
Aditya Birla Sun Life Insurance reported Q4 VNB and APE growth of 14 per cent, both above expectations. VNB margins improved 20 bps yoy. The management targets VNB margins of 18-20 per cent in FY27 and APE growth of 20 per cent over the next three years. Maintain Outperform: Our top pick in the NBFC space.
Published on May 6, 2026