Aditya Birla Capital Limited — Q1 FY25
Aditya Birla Capital reported a strong Q1 FY25 with consolidated PAT up 15% YoY to INR 745 crore and revenue up 26% YoY to INR 10,258 crore.
bullish
medium
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
92%Questions answered0Evaded / deflected12Questions auditedMixedNumbers vs filing
Answered
High priority
Status of merger approvals and timeline.
Asked by Chintan Shah, ICICI Securities
Management provided specific status and timeline for merger approvals.
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Question
So currently, what all approvals are pending, and, how much time do we anticipate? I think by March 2025, we expect the merger to be over. So, are we through with the timeline?
Vishakha Mulye, CEO
We have already got an in-principle approval from both BSE and NSE... My expectation is, since this is the merger of our 100% subsidiary into ABC, typically the time required is shorter... our endeavor would be to complete the process by March 31st, 2025.
Answered
High priority
Regulatory comfort with NBFC holding stakes in subsidiaries.
Asked by Chintan Shah, ICICI Securities
Management explained regulatory framework and expressed confidence in approvals.
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Question
Any thoughts on, whether, the regulator or whether the RBI would be comfortable, with our main NBFC lending arm, having, almost 50/50% stake in other subsidiaries?
Vishakha Mulye, CEO
Regulation does not prohibit NBFCs to hold the percentages that we are holding today... In our case, in case of insurance, we are allowed to hold more than 50% with a specific approval from RBI. There is no prohibition.
Answered
High priority
NBFC growth drivers and margin compression due to mix change.
Asked by Chintan Shah, ICICI Securities
Management explained the growth recalibration and margin impact clearly.
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Question
If you look at the growth in the NBFC business, it was around 2% QOQ, and still we are guiding for around 25% YY stagger... given that the margins also have given up quite a bit... is that due to the unsecured mix change, and will that continue?
Vijay Deshwal, Chief Strategy Officer CSO and Head of Investor Relations
We have grown 25% year-on-year. Yes, sequentially it is 2%, but that's a calibrated growth... we have dialed this segment down. But we continue to be very positive in terms of growing 25%+ year-on-year... margins have compressed because of the change in the product mix, but as we grow our unsecured business... we should be able to manage our margins.
Answered
High priority
Expected margin trajectory for FY25.
Asked by Chintan Shah, ICICI Securities
Management gave a clear guidance that margins will be around current levels.
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Question
For FY 2024, we had a margin of 6.9. So, do we expect margins to stabilize around similar levels for 2025, or there will be some compression in the mix?
Vijay Deshwal, Chief Strategy Officer CSO and Head of Investor Relations
So it should be around these levels, is what we see, in this year. Yeah, in the next few quarters, it will be in this range as well.
Answered
High priority
Growth trajectory and delinquency in unsecured segments.
Asked by Avinash Singh, Emkay Global
Management provided growth outlook and explained delinquency dynamics.
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Question
How the growth, in terms of AUM growth in these two, unsecured business and unsecured personal, is going to look? And in this kind of a recalibration... how is this sort of, you know, delinquency or GS3, trajectory going?
Vijay Deshwal, Chief Strategy Officer CSO and Head of Investor Relations
We continue to be very bullish on both these segments... we have built direct sourcing channels... In terms of the quality stage three... it's primarily because of the degrowth in the denominator. The normal flow is quite stable.
Answered
High priority
Life insurance margin dip and confidence in recovery.
Asked by Avinash Singh, Emkay Global
Management explained seasonal pattern and gave margin guidance range.
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Question
On life insurance now in quarter one, if you were to look at the margins, of course, the margins have dipped quite a bit... what is sort of giving you the confidence that you will be, by and large, able to come back to the same margin level?
Vijay Deshwal, Chief Strategy Officer CSO and Head of Investor Relations
First quarter for us is... we still were able to reach 20% plus NIM margins. So we actually catch up on our net NIM margins through the year... If you look at the guidance, it is still 18%+. Last year we were at about 20.2%. If you are in the 18%-19% range, we are still saying there could be a loss of about 100-250 basis points.
Answered
Medium priority
Strategy behind purchased loans and segment details.
Asked by Bhaskar Basu, Jefferies
Management provided segment and rationale for loan purchases.
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Question
This quarter also, you kind of brought about purchased loans of about 2%... can you help us understand which segment were these loans purchased, and what is the strategy around loan purchases going forward?
Vijay Deshwal, Chief Strategy Officer CSO and Head of Investor Relations
We dispersed close to 14,000-15,000 crore INR in a quarter... this is a small part... primarily secured loans... In terms of what is our strategy, these are portfolio interventions we look at... our ability to cherry-pick good quality portfolio.
Partial answer
Medium priority
Spreads on purchased loan pools vs organic.
Asked by Bhaskar Basu, Jefferies
Management described criteria but did not quantify spread comparison.
no specific spread comparison given
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Question
The spreads you make on these pools purchased, are they comparable, less or higher than your organic channel?
Vishakha Mulye, CEO
We always do our unit economics... it has to match our credit underwriting standards... in terms of unit economics, whether it is return on assets or return on equity, it has to mark up and meet that minimum hurdle.
Answered
Medium priority
OpEx guidance for NBFC.
Asked by Bhaskar Basu, Jefferies
Management gave clear cost-income ratio guidance.
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Question
On the OpEx side, OpEx has been obviously lower and, is it more seasonal? ... Any guidance on the OpEx side?
Vijay Deshwal, Chief Strategy Officer CSO and Head of Investor Relations
We have always operated in the range of 30%-31% cost-income ratio, and we will continue to operate in that range. Yes, there will be one quarter where some marketing expense comes out... but it will normalize.
Partial answer
Medium priority
Provision coverage and write-offs.
Asked by Bhaskar Basu, Jefferies
Management answered provision coverage but deferred on write-offs.
write-off number not provided
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Question
On the provision coverage, this has come down sequentially, so is there a recalibration of PD/LGD, or you expect it? What would be kind of the steady state provision coverage you expect from this book? And a related question is also around the write-offs this quarter, please.
Vijay Deshwal, Chief Strategy Officer CSO and Head of Investor Relations
Our provision coverage is quite in line. I think your last quarter was 49.9%. This quarter is 49.5%. So very, very within same line... For a higher risk segment, our provision coverage is almost 86%.
Answered
High priority
Medium-term ROA targets for NBFC.
Asked by Suresh Ganapathy, Macquarie Capital
Management reaffirmed ROA target and timeline.
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Question
You had earlier guided that in the NBFC business, you wanted ROA to be 2.7%-3%... Are you confident that you can meet this 2.7%-3% range? When it will happen?
Vijay Deshwal, Chief Strategy Officer CSO and Head of Investor Relations
We had always guided that we will come to 3% ROA in the next 2-3 years. We still are confident that we will be able to deliver... we will continue to follow 3%, and we will deliver that in the time period which we had shown.
Answered
High priority
Capital adequacy and need for capital raising.
Asked by Suresh Ganapathy, Macquarie Capital
Management quantified available capital and explained no near-term need.
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Question
You're growing at 25%, your ROE is at 15, 16%, and your capital adequacy is just at 16.5%... Are we looking at any kind of capital raising? What should be the amount?
Vijay Deshwal, Chief Strategy Officer CSO and Head of Investor Relations
We have close to about INR 1,900 crore-INR 2,000 crore of equity capital right now, which will suffice us for next about 28 months of growth. Also, the amalgamation of ABCL and ABFL helps us release a capital of close to about INR 3,500 crore. So I don't see CapEx in the near term should be an issue.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| NBFC AUM grew 25% YoY | 25% | 26% | Matches filing |
| Secured business grew 43% YoY | 43% | 26% | Overstated vs filing |
| SME segment grew 29% YoY | 29% | 26% | Overstated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.