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Aditya Birla Capital Limited — Q4 FY26
Aditya Birla Capital delivered a strong Q4 FY26 with consolidated PAT (ex-one-offs) up 30% YoY to INR 1,124 crore, driven by robust growth across NBFC, HFC, and insurance businesses.
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Aditya Birla Capital delivered a strong Q4 FY26 with consolidated PAT (ex-one-offs) up 30% YoY to INR 1,124 crore, driven by robust growth across NBFC, HFC, and insurance businesses. NBFC AUM grew 27% YoY to ~INR 1.6 lakh crore, with retail/MSME contributing 85% of incremental growth. HFC AUM surged 53% YoY to INR 47,452 crore, with ROA improving to 2.07%. Life insurance VNB margin expanded 260 bps YoY to 20.6%, while health insurance combined ratio improved to 103%. Management guided for continued growth leadership, with HFC targeting INR 1 lakh crore AUM in 24-30 months and NBFC aiming for 2.5% ROA. Key risk: potential margin compression from competitive pressures and rising unsecured exposure could offset operating leverage gains.
आदित्य बिड़ला कैपिटल ने चौथी तिमाही में शानदार प्रदर्शन किया। कंपनी का मुनाफा (एक बार के खर्च को छोड़कर) पिछले साल से 30% बढ़कर 1,124 करोड़ रुपये हो गया। इसकी वजह एनबीएफसी, हाउसिंग फाइनेंस और बीमा कारोबार में मजबूत वृद्धि रही। एनबीएफसी का कुल कर्ज 27% बढ़कर 1.6 लाख करोड़ रुपये हो गया, जिसमें 85% हिस्सा छोटे कारोबारियों और आम लोगों का है। हाउसिंग फाइनेंस का कर्ज 53% बढ़कर 47,452 करोड़ रुपये हो गया। जीवन बीमा का मुनाफा बढ़ा और स्वास्थ्य बीमा का खर्च कम हुआ। कंपनी का लक्ष्य अगले 2-2.5 साल में हाउसिंग फाइनेंस का कर्ज 1 लाख करोड़ रुपये तक पहुंचाना है। लेकिन बाजार में बढ़ती प्रतिस्पर्धा और कर्ज देने में जोखिम से मुनाफा कम हो सकता है।
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Margin compression from competitive pressures
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NBFC AUM
INR 1.6 lakh crore
+27% YoY
NBFC AUM grew 27% YoY, driven by retail and MSME segments which contributed 85% of incremental growth.
HFC AUM
INR 47,452 crore
+53% YoY
Housing finance AUM surged 53% YoY, with ROA improving 63 bps YoY to 2.07%.
Life Insurance VNB Margin
20.6%
+260 bps YoY
VNB margin expanded 260 bps YoY to 20.6%, driven by favorable product mix shift towards traditional and protection.
Health Insurance Gross Written Premium
INR 7,292 crore
+39% YoY
Health insurance GWP grew 39% YoY, with market share in SAHI improving 110 bps to 13.7%.
What Changed vs Last Quarter
NEW
HFC AUM target of INR 1 lakh crore in 24-30 months
Aditya Birla Housing Finance aims to achieve AUM of INR 1 lakh crore within the next 24 to 30 months, supported by branch expansion and digital initiatives.
NEW
HFC ROA guidance of 2.1%-2.2% for FY27
Housing finance expects ROA in the range of 2.1% to 2.2% for FY27, driven by operating leverage and stable credit costs.
NEW
NBFC credit cost guidance of 1.1%-1.2%
NBFC expects credit cost to remain in the range of 1.1% to 1.2% even as unsecured book grows, supported by a predominantly secured portfolio.
UPDATED
Life insurance individual FYP CAGR of 20%+ for next 3 years
Aditya Birla Sun Life Insurance targets a CAGR of over 20% in individual first year premium over the next three years, while maintaining VNB margins at 18%-20%.
DROPPED
NBFC loan book growth of 24-25%
Management expects to double the NBFC loan book in three years, implying ~25% CAGR.
DROPPED
NBFC ROA expansion to ~2.5%
NBFC ROA (ex-labor code impact at 2.28%) is expected to expand to ~2.5% in the next 4-5 quarters.
DROPPED
Double life insurance VNB in three years
Management aims to double absolute net VNB in three years while expanding VNB margins above 18%.
NEW RISK
Margin compression from competitive pressures
NBFC margins saw slight compression due to MTM losses and competitive pricing; further spread compression could pressure profitability.
NEW RISK
Rising unsecured exposure may increase credit costs
Growth in unsecured personal and consumer loans (now 13.4% of NBFC AUM) could lead to higher credit costs if economic conditions deteriorate.
NEW RISK
Geopolitical tensions and macro uncertainty
Management noted no material impact from West Asia tensions but remains watchful; external volatility could affect portfolio quality.
NEW RISK
Life insurance assumption changes impacting EV
Negative operating variance in life insurance due to assumption changes (e.g., reduced paid-up benefits) could weigh on embedded value growth.
RISK GONE
Yield improvement may be delayed
Despite favorable mix shift, yields have remained flat; management expects it to take a couple more quarters for improvement.
RISK GONE
Unsecured portfolio recalibration
Management is cutting high-risk segments in unsecured loans, which could temper growth and delay margin expansion.
RISK GONE
GST impact on insurance margins
Life insurance VNB margins face headwinds from GST changes; only 40% of impact has been mitigated via commercial arrangements.
RISK GONE
ECL model assumptions not disclosed
Management declined to provide ECL breakdown or PD/LGD assumptions, leaving uncertainty about provision adequacy.
🤫 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 FY25, Q2 FY26, Q4 FY25
Health insurance business expects to improve combined ratio from 105% in previous year to below 105% in FY26.
Mentioned in Q2 FY26, Q3 FY25, Q3 FY26
Life insurance VNB margins face headwinds from GST changes; only 40% of impact has been mitigated via commercial arrangements.
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 FY25, Q3 FY26
NBFC ROA (ex-labor code impact at 2.28%) is expected to expand to ~2.5% in the next 4-5 quarters.
Fast read
Guidance and risk preview
Aditya Birla Housing Finance aims to achieve AUM of INR 1 lakh crore within the next 24 to 30 months, supported by branch expansion and digital ini...
NBFC margins saw slight compression due to MTM losses and competitive pricing; further spread compression could pressure profitability.
View Risks →