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Aditya Birla Capital Limited — Q2 FY25
Aditya Birla Capital reported a strong Q2 FY25 with consolidated PAT of INR 1,001 crore (up 42% YoY), including a one-time gain of INR 167 crore from the sale of its broking subsidiary.
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Aditya Birla Capital reported a strong Q2 FY25 with consolidated PAT of INR 1,001 crore (up 42% YoY), including a one-time gain of INR 167 crore from the sale of its broking subsidiary. Revenue grew 36% YoY to INR 12,007 crore. The NBFC portfolio grew 23% YoY to INR 1.15 trillion, with credit cost improving to 1.25% (down 18 bps QoQ). The housing finance business saw AUM surge 51% YoY to INR 23,236 crore, driven by record disbursements. Asset management AUM reached INR 3.8 trillion, with SIP flows up 47% YoY to INR 1,428 crore. Life insurance VNB margin was 7.4% in H1, with management guiding to 17-18% for the full year. Health insurance GWP grew 39% YoY. Key risks include potential margin pressure from new surrender regulations in life insurance and elevated competitive intensity in lending. Management remains confident in achieving 25% CAGR in NBFC portfolio over 2-3 years.
आदित्य बिड़ला कैपिटल ने दूसरी तिमाही में 1,001 करोड़ रुपये का शुद्ध लाभ कमाया, जो पिछले साल से 42% ज्यादा है। इसमें ब्रोकिंग कंपनी बेचने से 167 करोड़ रुपये का एकमुश्त फायदा शामिल है। कुल आय 36% बढ़कर 12,007 करोड़ रुपये हुई। कर्ज देने वाले कारोबार में 23% की बढ़ोतरी हुई और बुरे कर्ज का खर्च घटकर 1.25% रह गया। हाउसिंग फाइनेंस में कर्ज 51% बढ़कर 23,236 करोड़ रुपये पहुंच गया। म्यूचुअल फंड में निवेश 3.8 लाख करोड़ रुपये हो गया, जिसमें एसआईपी 47% बढ़ी। जीवन बीमा में मुनाफा बढ़ाने का लक्ष्य 17-18% है। स्वास्थ्य बीमा में 39% बढ़ोतरी हुई। कंपनी को लगता है कि अगले 2-3 साल में कर्ज कारोबार 25% सालाना दर से बढ़ेगा।
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Life insurance VNB margin guidance may be optimistic
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NBFC Credit Cost
1.25%
-18 bps QoQ
Credit cost improved sequentially, well within the stated guidance of 1.5%.
HFC AUM Growth
INR 23,236 crore
+51% YoY
Housing finance portfolio grew strongly, driven by record quarterly disbursements of INR 4,010 crore.
Monthly SIP Flows
INR 1,428 crore
+47% YoY
SIP inflows in September 2024 increased sharply, reflecting strong retail investor interest.
Life Insurance VNB Margin (H1)
7.4%
N/A
VNB margin for H1 FY25 was impacted by higher ULIP mix and upfront investments; full-year guidance is 17-18%.
What Changed vs Last Quarter
NEW
HFC portfolio to double in 18-24 months
Management guided that the housing finance portfolio is on track to double over the next 18-24 months, supported by digital and distribution investments.
UPDATED
NBFC portfolio CAGR of 25% over 2-3 years
Management reiterated confidence in growing the overall NBFC loan portfolio at a CAGR of 25% over the next two to three years.
UPDATED
Life insurance VNB margin of 17-18% for FY25
Despite H1 VNB margin of 7.4%, management expects full-year VNB margin to be in the 17-18% range, driven by product mix optimization and agency channel growth.
UPDATED
Credit cost guidance of ~1.5% for NBFC
Management expects NBFC credit cost to remain range-bound around 1.5%, with current levels at 1.25%.
DROPPED
Health insurance combined ratio target of 100% by FY26
Health insurance business guided to achieve a combined ratio of 100% by FY26, improving from 112% in Q1 FY25.
NEW RISK
Life insurance VNB margin guidance may be optimistic
Analyst questioned the feasibility of achieving 17-18% VNB margin in H2 given H1 was only 7.4%, with ULIP mix high and new surrender regulations effective October 1.
NEW RISK
NBFC margin compression from product mix shift
NIM declined sequentially due to increasing share of secured loans (74% of portfolio), which carry lower yields. Recovery may take a few quarters.
NEW RISK
Regulatory scrutiny on aggressive housing loan growth
Analyst raised concerns about RBI's stance on aggressive lending in housing; management denied any direct communication but acknowledged industry-wide caution.
NEW RISK
Provision coverage ratio decline in NBFC
PCR in NBFC declined to 46% (secured segment to ~30%) due to product mix shift, which could leave less buffer if stress emerges.
RISK GONE
Life insurance margin compression from regulatory changes
New surrender value regulations could impact traditional product margins by 150-200 bps, though management expects to mitigate through commission realignment.
RISK GONE
Unsecured loan asset quality pressure
Stage 3 in unsecured business loans inched up due to denominator effect; management noted it is stable but remains a watch area.
RISK GONE
NBFC ROA target of 3% may be delayed
Current ROA of 2.41% is below the medium-term target of 2.7-3%, and product mix shift could delay achievement.
RISK GONE
Banca channel growth dependency
Life insurance growth was impacted by muted performance from one banca partner; new tie-ups may take time to scale.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q1 FY25, Q2 FY24, Q4 FY24
Health insurance business guided to achieve a combined ratio of 100% by FY26, improving from 112% in Q1 FY25.
Mentioned in Q1 FY25, Q4 FY24
New surrender value regulations could impact traditional product margins by 150-200 bps, though management expects to mitigate through commission realignment.
Mentioned in Q1 FY24, Q2 FY24
Management reiterated guidance to double NBFC loan book in three years and improve ROA to 3% through product mix shift and margin improvement.
Mentioned in Q1 FY25, Q4 FY24
Stage 3 in unsecured business loans inched up due to denominator effect; management noted it is stable but remains a watch area.
Fast read
Guidance and risk preview
Management reiterated confidence in growing the overall NBFC loan portfolio at a CAGR of 25% over the next two to three years.
Analyst questioned the feasibility of achieving 17-18% VNB margin in H2 given H1 was only 7.4%, with ULIP mix high and new surrender regulations ef...
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