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Aditya Birla Capital Limited — Q2 FY26
Aditya Birla Capital reported a 3% YoY PAT growth to INR 855 crore in Q2 FY26, with consolidated revenue up 4% YoY to INR 12,481 crore.
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Aditya Birla Capital reported a 3% YoY PAT growth to INR 855 crore in Q2 FY26, with consolidated revenue up 4% YoY to INR 12,481 crore. The NBFC segment saw record disbursements of INR 21,990 crore (up 39% QoQ) and a 22% YoY portfolio growth to INR 1.4 trillion, while asset quality improved with GS2+GS3 declining 121bps YoY to 3.03%. The housing finance business continued strong momentum with 65% YoY AUM growth to INR 38,270 crore and ROA improving 23bps QoQ to 1.82%. The life insurance business guided for net VNB margin above 18% in FY26, while health insurance aims to improve combined ratio from 105% to below 105%. Key risks include potential margin pressure from GST exemption on insurance products and competitive intensity in housing finance.
आदित्य बिड़ला कैपिटल ने दूसरी तिमाही में 3% मुनाफा बढ़ाकर 855 करोड़ रुपये किया। कुल कमाई 4% बढ़कर 12,481 करोड़ रुपये हुई। कंपनी के एनबीएफसी (गैर-बैंकिंग वित्त) सेगमेंट ने रिकॉर्ड 21,990 करोड़ रुपये का कर्ज दिया, जो पिछली तिमाही से 39% ज्यादा है। कुल कर्ज पोर्टफोलियो 22% बढ़कर 1.4 लाख करोड़ रुपये हुआ। खराब कर्ज (जीएस2+जीएस3) में 1.21% की गिरावट आई, जो अब 3.03% है। हाउसिंग फाइनेंस का कारोबार तेजी से बढ़ा - कुल कर्ज 65% बढ़कर 38,270 करोड़ रुपये हुआ। जीवन बीमा 18% से ज्यादा मार्जिन का लक्ष्य रखता है। स्वास्थ्य बीमा खर्च अनुपात 105% से नीचे लाना चाहता है। जोखिम: जीएसटी छूट से मार्जिन पर दबाव और हाउसिंग फाइनेंस में कड़ी प्रतिस्पर्धा।
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GST exemption impact on insurance margins
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NBFC Disbursements
INR 21,990 Cr
+39% QoQ
Highest-ever quarterly disbursement driven by personal loans and secured SME loans.
HFC AUM Growth
INR 38,270 Cr
+65% YoY
Housing finance portfolio grew sharply, gaining market share in prime and affordable segments.
GS2+GS3 Ratio (NBFC)
3.03%
-121bps YoY
Asset quality improved significantly across all segments, with secured SME GS3 at 1.2%.
Life Insurance Net VNB Margin
11.6%
+420bps YoY
Margin expansion driven by product mix shift towards traditional and protection plans.
What Changed vs Last Quarter
NEW
Health insurance combined ratio improvement in FY26
Health insurance business expects to improve combined ratio from 105% in previous year to below 105% in FY26.
UPDATED
NBFC credit cost to remain at 1.2%-1.3% in FY26
Management expects credit cost to stay in the 1.2%-1.3% range for the full year, supported by improving asset quality.
UPDATED
HFC ROA target of 2%-2.2% in 6-8 quarters
Housing finance business aims to achieve ROA of 2%-2.2% over the next six to eight quarters, driven by operating leverage.
UPDATED
Life insurance net VNB margin above 18% in FY26
Despite GST exemption impact, management maintains guidance of net VNB margin exceeding 18% for FY26.
DROPPED
Life insurance individual FYP growth of 20%-25% for next 3 years
Life insurance business targets individual first year premium growth of 20% to 25% annually over the next three years.
NEW RISK
GST exemption impact on insurance margins
GST waiver on life and health insurance premiums may cause short-term margin pressure due to loss of input tax credits and inability to immediately reprice products.
NEW RISK
Competitive intensity in housing finance
Increasing competition in the housing finance segment could compress net interest margins, though management expects operating leverage to offset.
NEW RISK
Regulatory changes in mutual fund TER structure
Proposed SEBI changes to total expense ratio (TER) calculation could impact AMC profitability, though management is engaging with regulators.
NEW RISK
NBFC ROA stuck at 2.2% despite margin improvement
Despite margin expansion and lower credit costs, NBFC ROA remained at 2.2%, raising questions about achieving medium-term target of 2.5%.
RISK GONE
Uncertainty in small-ticket unsecured MSME segment
Management remains cautious on the small-ticket unsecured MSME segment (1.3% of NBFC portfolio) due to macroeconomic uncertainties, with disbursements declining 8% sequentially.
RISK GONE
Low provision coverage on unsecured SME NPAs
Analyst raised concern that PCR on unsecured SME NPAs is only 35.7%, though management considers it sufficient given 53% coverage under government guarantee scheme.
RISK GONE
NIM compression in NBFC due to mix shift
Net interest margin including fees declined to 5.97%, and management expects improvement only as higher-yielding unsecured portfolio grows.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q1 FY26, Q2 FY25, Q3 FY25
Life insurance business maintains guidance to expand net VNB margins to 18%+ for the current fiscal year.
Mentioned in Q1 FY26, Q2 FY25, Q3 FY25
Net interest margin including fees declined to 5.97%, and management expects improvement only as higher-yielding unsecured portfolio grows.
Mentioned in Q1 FY25, Q2 FY25, Q4 FY25
Management expects to double the NBFC loan book over the next three years, implying a CAGR of ~25%.
Mentioned in Q1 FY26, Q4 FY25
Life insurance business targets individual first year premium growth of 20% to 25% annually over the next three years.
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Guidance and risk preview
Management expects credit cost to stay in the 1.2%-1.3% range for the full year, supported by improving asset quality.
GST waiver on life and health insurance premiums may cause short-term margin pressure due to loss of input tax credits and inability to immediately...
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