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Aditya Birla Capital Limited — Q4 FY25
Aditya Birla Capital reported a solid Q4 FY25 with consolidated PAT of INR 865 crore (+6% YoY) and revenue of INR 14,138 crore (+13% YoY).
bullish
high
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Aditya Birla Capital reported a solid Q4 FY25 with consolidated PAT of INR 865 crore (+6% YoY) and revenue of INR 14,138 crore (+13% YoY). The NBFC segment delivered strong growth with AUM reaching INR 1.26 trillion (+20% YoY) and credit costs improving to 1.21% (-22bps YoY). The housing finance business was a standout, with AUM surging 69% YoY to INR 31,053 crore and asset quality best-in-class (GS3 at 0.66%). Management guided for NBFC portfolio CAGR of 25% over three years and HFC ROA expansion to 2%-2.2% in 8-10 quarters. Life insurance VNB margin held at 18%, while health insurance achieved breakeven. Key risks include elevated NPAs in unsecured business loans (GS3 at 4.7%) and potential margin pressure from a declining rate environment.
आदित्य बिड़ला कैपिटल ने वित्त वर्ष 2025 की चौथी तिमाही में अच्छा प्रदर्शन किया। कंपनी का कुल मुनाफा 865 करोड़ रुपये रहा, जो पिछले साल से 6% ज्यादा है। कमाई 14,138 करोड़ रुपये रही, जो 13% बढ़ी है। कंपनी के एनबीएफसी (गैर-बैंकिंग वित्त) कारोबार ने जोरदार वृद्धि दिखाई। इसकी कुल संपत्ति 1.26 लाख करोड़ रुपये हो गई, जो 20% ज्यादा है। कर्ज देने में होने वाला नुकसान घटकर 1.21% रह गया। हाउसिंग फाइनेंस कारोबार ने सबसे अच्छा प्रदर्शन किया। इसकी संपत्ति 69% बढ़कर 31,053 करोड़ रुपये हो गई। खराब कर्ज सिर्फ 0.66% रहा। कंपनी का कहना है कि एनबीएफसी कारोबार अगले तीन साल में हर साल 25% बढ़ेगा। हाउसिंग फाइनेंस का मुनाफा 8-10 तिमाहियों में 2% से 2.2% तक पहुंच जाएगा। जीवन बीमा का मुनाफा 18% पर स्थिर रहा। स्वास्थ्य बीमा ने घाटा खत्म कर लिया है। मुख्य जोखिम यह है कि छोटे कर्ज में खराब कर्ज 4.7% है। ब्याज दरें घटने से म
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Elevated NPAs in unsecured business loans
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NBFC AUM
INR 1.26T
+20% YoY
NBFC loan portfolio grew 20% year-on-year to about INR 1.26 trillion.
HFC AUM
INR 31,053 Cr
+69% YoY
Housing finance AUM grew 69% year-on-year, crossing INR 31,000 crore.
NBFC Credit Cost
1.21%
-22bps YoY
Credit cost improved 22 basis points year-on-year to 1.21% in Q4.
Life Insurance VNB Margin
18%
flat YoY
VNB margin for life insurance stood at 18% for FY2025, with absolute VNB up 17%.
What Changed vs Last Quarter
NEW
NBFC portfolio CAGR of 25% over three years
Management expects to double the NBFC loan book over the next three years, implying a CAGR of ~25%.
NEW
HFC ROA target of 2%-2.2% in 8-10 quarters
Housing finance aims to achieve ROA of 2%-2.2% within 8-10 quarters, driven by operating leverage.
NEW
Life insurance individual FYP CAGR of 20%-25% over three years
Life insurance business targets 20%-25% CAGR in individual first-year premium over the next three years.
NEW
Health insurance combined ratio below 100% at earliest
Health insurance aims to achieve combined ratio below 100% as per old accounting norms, and as per new norms shortly.
DROPPED
Life Insurance VNB margin of 17-18% for FY25
Management expects full-year VNB margin to reach 17-18%, driven by product repricing and cost efficiencies.
DROPPED
NBFC credit cost below 1.5%
Credit cost guidance maintained at below 1.5%, with Q3 at 1.36%.
DROPPED
HFC ROA target of 2-2.1% in 18-24 months
Housing finance aims for ROA of 2-2.1% as operating leverage improves with scale.
DROPPED
Amalgamation of Aditya Birla Finance with ABCL by March 2025
The amalgamation is expected to be completed by 31st March 2025, subject to NCLT approval.
NEW RISK
Elevated NPAs in unsecured business loans
GS3 in unsecured business loans rose to 4.7% due to stress in the segment, though partly explained by government guarantee delaying write-offs.
NEW RISK
Margin pressure from declining rate environment
With 50bps repo rate cut, asset yields may reprice faster than liability costs, potentially compressing NIMs in the near term.
NEW RISK
HFC capital adequacy near regulatory threshold
HFC CRAR at 14.3% is close to the regulatory minimum of 15%, requiring continued capital infusion to support growth.
RISK GONE
Margin compression from product mix shift in NBFC
Shift towards secured loans has compressed NIM by ~90bps YoY, with ROA declining from 2.4% to 2.1%.
RISK GONE
Impact of surrender value regulations on life insurance margins
New surrender guidelines and product repricing caused timing losses in Q3, though management expects recovery in Q4.
RISK GONE
Slowdown in NBFC disbursements due to cautious stance
Disbursements decelerated in Q3, particularly in consumer loans, as management dialed down unsecured lending.
RISK GONE
Potential impact of rate cuts on HFC margins
Analyst raised concern about margin risk from rate cuts; management noted 95% variable rate assets and diversified liabilities.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q1 FY25, Q2 FY24, Q2 FY25, Q3 FY25, Q4 FY24
Management expects full-year VNB margin to reach 17-18%, driven by product repricing and cost efficiencies.
Mentioned in Q1 FY25, Q2 FY25, Q3 FY25, Q4 FY24
Credit cost guidance maintained at below 1.5%, with Q3 at 1.36%.
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 Q2 FY25, Q3 FY25
Shift towards secured loans has compressed NIM by ~90bps YoY, with ROA declining from 2.4% to 2.1%.
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.
Fast read
Guidance and risk preview
Management expects to double the NBFC loan book over the next three years, implying a CAGR of ~25%.
GS3 in unsecured business loans rose to 4.7% due to stress in the segment, though partly explained by government guarantee delaying write-offs.
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