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
✓ 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.
67%Questions answered2Evaded / deflected12Questions audited
Partial answer
High priority
Early delinquency trends in personal/consumer loans under INR 50k
Asked by Anuj Singla, Bank of America
Management gave portfolio composition but did not provide early delinquency rates or specific actions on cohorts.
no specific delinquency numbers givenfocused on portfolio size instead of trends
Read the exchange
Question
So can you talk about the early delinquency trends in this quarter and any action we have taken on the customer cohort or the new sourcing in this segment?
Rakesh Singh, CEO and Director, Aditya Birla Finance
So if you look at, Anuj, our unsecured and personal consumer loans with ticket size less than INR 50,000, and tenor less than 30 days is only 1% of our total loan growth. ... we have been monitoring this portfolio very closely ... we are tightening the scorecards.
Evasive
High priority
Delinquencies in digital ecosystem partner-sourced loans vs traditional
Asked by Anuj Singla, Bank of America
Management avoided direct comparison of delinquency rates between channels, instead discussed cross-sell and calibration.
did not directly compare delinquency ratesshifted to cross-sell and calibration
Read the exchange
Question
Now, one of the peers today commented that the delinquencies in this portfolio sourced through the digital ecosystem on the Fintech partners are higher versus traditional partners. Can you talk about your experience here in your portfolio?
Rakesh Singh, CEO and Director, Aditya Birla Finance
No, I think the cross-sell, almost 40% plus of the new personal loans come through these consumer loans. ... we are not seeing any deterioration in terms of... we are calibrating... our portfolio looks quite stable.
Answered
High priority
Capital requirements for NBFC over next two years
Asked by Anuj Singla, Bank of America
Management gave a specific timeframe (two years) and referenced the capital raise amount.
Read the exchange
Question
So how should we look at the capital requirements of this business, maybe over the next two years?
Rakesh Singh, CEO and Director, Aditya Birla Finance
So, Anuj, we raised INR 3,000 crore of capital, if you recollect, during the month of June, which, at a franchise level, we are confident that it will suffice us for two years, which is closure of FY 2025.
Partial answer
High priority
Proportion of personal/consumer loans originated via fintech and their GS3
Asked by Abhijit Tibrewal, Motilal Oswal
Management provided the proportion and ticket size but did not give the specific GS3 for the fintech-originated portfolio.
did not give GS3 for fintech-originated loans specificallygave overall GS3 instead
Read the exchange
Question
Have you had a chance to check what proportion of your personal consumer or unsecured business loans is being originated through this fintech ecosystem? And likewise, what is the average ticket size of these loans? And currently, as of September, what was your Gross Stage Three in this portfolio?
Rakesh Singh, CEO and Director, Aditya Birla Finance
A total of INR 19,200 crore, which is our personal consumer. The consumer, which is around INR 4,200 crore odd, which is 22% of our retail and consumer business. That's where the digital partnership really plays out.
Answered
Medium priority
Early warning indicators in consumer portfolio despite stable asset quality
Asked by Abhijit Tibrewal, Motilal Oswal
Management confirmed they review and act on early warnings, citing specific actions like stopping partnerships.
Read the exchange
Question
I mean, are you not seeing any fintech partners where you are evaluating whether you should continue that partnership or whether you should not? ... there are no early warning indicators that you're seeing in your consumer portfolio at this point in time?
Rakesh Singh, CEO and Director, Aditya Birla Finance
In terms of we review these portfolios on a regular basis, on a weekly basis. ... whichever cohort, partnerships or segments which are not looking good, we close it and tighten it then and there. ... we would have taken a call, maybe 12 months back or 15 months back with few of the partners.
Partial answer
High priority
Margin and ROE outlook for NBFC and housing finance
Asked by Parag Thakkar, ANVIL WEALTH
Management discussed trends but did not provide specific margin or ROE targets for NBFC or housing finance.
no specific margin or ROE numbers given for NBFCvague guidance
Read the exchange
Question
So basically, my question is that, what kind of margin picture do you see and ROE picture do you see, on the NBFC side as well as housing finance side?
Rakesh Singh, CEO and Director, Aditya Birla Finance
If you look at our cost of funds went up by 14 basis points, though our yields improved for the quarter, but because of the cost of funds went up, that is the reason why the margins slightly... we are quite confident that with the change in the product mix, we will be back and to the normal margins.
Answered
High priority
Red flags in digital partnership loans
Asked by Parag Thakkar, ANVIL WEALTH
Management provided specific red flags (leverage tracking, bounce rate) and gave a concrete statistic (12% customers with 1.5x leverage increase).
Read the exchange
Question
So what kind of red flags are there in your system, for example, balance check, rate or whatever, which you can highlight, which gives us comfort that on the consumer side, especially in your digital partnerships and FinTech, our asset quality will remain robust.
Rakesh Singh, CEO and Director, Aditya Birla Finance
I mentioned earlier, I think we are tracking the leverage. ... 12% of our customers over the last nine months, we have seen that they have taken their leverage has gone up by 1.5x. ... the first indicator is the bounce rate. And our bounce rate is still improving, and it's quite stable.
Partial answer
Medium priority
Growth and competitive intensity in corporate/mid-market and construction finance
Asked by Speaker 15, Carnelian Capital
Management described the portfolio but did not answer the question about competitive intensity affecting NIMs.
did not address competitive intensity or NIM impact directly
Read the exchange
Question
So two questions to this part. One was specifically on construction finance. ... And secondly, overall corporate and mid-market, how do we see the growth, you know, in this particular segment? Is the competitive intensity out there which would kind of impact the NIMs going ahead?
Rakesh Singh, CEO and Director, Aditya Birla Finance
So if you look at the developer finance, INR 4,200 crore, which went to INR 5,300-INR 5,400 crore, yes, growth of INR 1,000-odd crore in that portfolio. ... majority of our exposure ... is to Category A developers ... very stable, very well-performing portfolio. ... growth drivers will remain retail and SME.
Answered
Medium priority
Write-offs in NBFC book this quarter and prior quarter
Asked by Bhaskar Basu, Jefferies
Management provided exact numbers for both quarters.
Read the exchange
Question
Firstly, a housekeeping question: What was the write-offs in the NBFC book this quarter and the prior quarter?
Rakesh Singh, CEO and Director, Aditya Birla Finance
Prior quarter, INR 490 crore. So prior quarter was INR 490 crore, and this quarter is INR 369 crore.
Evasive
High priority
Proportion of personal/consumer loan book originated via fintech
Asked by Bhaskar Basu, Jefferies
Management did not provide the requested percentage, instead gave a general statement about the consumer segment.
did not give a percentagereferred to earlier answer that was also vague
Read the exchange
Question
My second question was basically within the INR 19,000 crore of PL and consumer loan book, I mean, what percentage is basically fintech origin?
Rakesh Singh, CEO and Director, Aditya Birla Finance
Bhaskar, we mentioned this. Most of the fintech origination comes in the consumer segment, where we acquire customers, which is small-ticket customers in the consumer segment.
Answered
High priority
Yield compression and competition in housing finance
Asked by Nischint Chawathe, Kotak Institutional Equities
Management gave specific yield numbers and acknowledged competition, providing context for stabilization.
Read the exchange
Question
The first one for Pankaj, and, you know, if I look at the housing business yields, you know, the yields have been sort of flattish or in fact have gone down a little bit sequentially. You know, how should one read this? And, you know, some of the players have been kind of, you know, talking about increasing competition in the space.
Pankaj Gadgil, Managing Director and CEO, Aditya Birla Housing Finance
So like you rightly said, I think the rates that we were having in quarter one was 11.56% in the IR, which has now plateaued to about 11.3%. ... I think we should be more broadly stabilized here. Yes, market is very competitive.
Answered
Medium priority
Explanation for 200 bps margin expansion in life insurance
Asked by Nischint Chawathe, Kotak Institutional Equities
Management explained the drivers (product mix, protection uptake, productivity) and gave a specific margin guidance.
Read the exchange
Question
I'm just trying to understand, you know, most of the players have, you know, at this point of time, reported a compression in margins, while, you know, you have reported a fairly healthy 200 basis point sort of expansion. What kind of explains that?
Pankaj Gadgil, Managing Director and CEO, Aditya Birla Housing Finance
The expansion is essentially on account of maintaining our traditional book mix. We've seen some uptake on the business that we are doing on the protection side, but also because still we continue to reap the benefits of higher productivity ... we maintained our guidance for end of year to be safe. Last year we were at 23%, and we will be around that range, 23%-24% margins even by the end of this year.