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Aditya Birla Capital Limited — Q2 FY24
Aditya Birla Capital delivered a strong Q2 FY24 with consolidated revenue up 22% YoY to INR 8,831 crore and PAT up 44% YoY to INR 705 crore.
bullish
high
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Aditya Birla Capital delivered a strong Q2 FY24 with consolidated revenue up 22% YoY to INR 8,831 crore and PAT up 44% YoY to INR 705 crore. The lending portfolio grew 41% YoY to INR 109,000 crore, driven by NBFC and HFC disbursement growth of 32% and 52% YoY respectively. Asset quality improved with NBFC gross stage 3 at 2.64% and HFC at 2.60%. The digital B2B platform Udyog Plus crossed 164,000 registrations. Life insurance VNB margins expanded 195 bps YoY to 14.2% in H1. Management guided for NBFC book doubling in three years with ROA improving to 3%, and life insurance VNB margins of 23%+ for FY24. Key risk: potential stress in small-ticket unsecured consumer loans, though management is proactively tightening underwriting and monitoring leverage.
आदित्य बिड़ला कैपिटल ने दूसरी तिमाही में शानदार प्रदर्शन किया। कंपनी की कुल आय पिछले साल से 22% बढ़कर 8,831 करोड़ रुपये हो गई। मुनाफा 44% बढ़कर 705 करोड़ रुपये रहा। कर्ज देने का कारोबार 41% बढ़कर 1,09,000 करोड़ रुपये हो गया। कंपनी के एनबीएफसी और हाउसिंग फाइनेंस सेक्शन ने क्रमशः 32% और 52% ज्यादा कर्ज बांटे। खराब कर्ज का स्तर कम रहा। डिजिटल प्लेटफॉर्म उद्योग प्लस पर 1.64 लाख से ज्यादा लोग रजिस्टर हुए। जीवन बीमा का मुनाफा बढ़ा। कंपनी का लक्ष्य तीन साल में एनबीएफसी कारोबार दोगुना करना है। छोटे असुरक्षित कर्जों में कुछ जोखिम है, लेकिन कंपनी सतर्क है।
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Stress in small-ticket unsecured consumer loans
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NBFC AUM Growth
INR 93,522 crore
+44% YoY
NBFC loan portfolio grew 44% YoY to INR 93,522 crore, driven by retail and SME segment growth of 49% YoY.
HFC Disbursements
INR 1,882 crore
+52% YoY
Housing finance disbursements grew 52% YoY, with loan portfolio crossing INR 15,000 crore.
Life Insurance VNB Margin (H1)
14.2%
+195 bps YoY
Net VNB margin expanded 195 bps YoY to 14.2% in H1 FY24, driven by product mix and proprietary channel growth.
Udyog Plus Registrations
164,000+
N/A (new platform)
B2B MSME platform Udyog Plus crossed 164,000 registrations within six months of launch, with monthly run-rate disbursement of INR 50 crore.
What Changed vs Last Quarter
NEW
Health insurance combined ratio to normalize in Q3
Mayank Bathwal expects combined ratio to normalize in Q3 FY24 as seasonality effects from group business growth subside.
UPDATED
NBFC book to double in three years, ROA to 3%
Management reiterated guidance to double NBFC loan book in three years and improve ROA to 3% through product mix shift and margin improvement.
UPDATED
Life insurance VNB margin of 23%+ for FY24
Kamlesh Rao guided for net VNB margin of 23%+ for full year FY24, consistent with last year's exit margin.
DROPPED
NBFC NIM expansion to 7.5% in 2-3 years
NBFC net interest margin is targeted to reach 7.5% over the next 2-3 years, driven by product mix shift towards retail and SME.
DROPPED
Housing finance NIM range of 4.7%-5%
Housing finance NIM is expected to remain range-bound between 4.7% and 5% as cost of borrowings may increase.
NEW RISK
Stress in small-ticket unsecured consumer loans
Industry-wide concerns about rising delinquencies in sub-INR 50,000 loans, though management reports stable portfolio with proactive tightening.
NEW RISK
Competition compressing housing finance yields
HFC yields declined sequentially due to competitive pressure and lag in cost of funds pass-through, though management expects stabilization.
NEW RISK
Dependence on bank partnerships for life insurance growth
Largest bank partner degrew due to strategic shift to subsidiary, partially offset by new bank tie-ups; execution risk remains.
RISK GONE
Rising unsecured loan exposure
Personal and consumer loans now constitute 20% of NBFC AUM and 36% of disbursements, with potential asset quality risks if economic conditions weaken.
RISK GONE
FLDG implementation uncertainty
Management is evaluating FLDG arrangements with digital partners, but current credit costs sit on the balance sheet; any adverse regulatory changes could impact profitability.
RISK GONE
Health insurance combined ratio remains high
Health insurance combined ratio stood at 117% in Q1, indicating underwriting losses, though management expects normalization in coming quarters.
RISK GONE
Housing finance cost-to-income spike
Housing finance operating expenses rose sharply due to technology investments, with cost-to-asset at peak levels; operating leverage may take time to materialize.
Fast read
Guidance and risk preview
Management reiterated guidance to double NBFC loan book in three years and improve ROA to 3% through product mix shift and margin improvement.
Industry-wide concerns about rising delinquencies in sub-INR 50,000 loans, though management reports stable portfolio with proactive tightening.
View Risks →