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NBFC yield improvement may take longer
View Risks →Aditya Birla Capital Limited — Q3 FY26
Aditya Birla Capital delivered a strong Q3 FY26 with consolidated PAT up 41% YoY to ₹983 crore and revenue up 30% YoY to ₹14,181 crore.
bullish
high
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Aditya Birla Capital delivered a strong Q3 FY26 with consolidated PAT up 41% YoY to ₹983 crore and revenue up 30% YoY to ₹14,181 crore. Growth was driven by robust lending momentum: NBFC AUM grew 24% YoY to ₹1.48 lakh crore and HFC AUM surged 58% YoY to ₹42,204 crore. Asset quality improved across segments, with NBFC GS2+GS3 down 150bps YoY to 2.8% and HFC stage 2+3 at 0.95%. The housing finance subsidiary secured a landmark ₹2,750 crore capital infusion from Advent International, valuing ABHFL at ₹19,250 crore. Life insurance VNB margin expanded 380bps to 14.2%, and health insurance gross premium grew 39% YoY. Management guided for NBFC loan book growth of ~25% and life insurance individual FYP CAGR of 20%+ over three years. Key risk: yield improvement in NBFC may take longer than expected due to portfolio mix recalibration.
आदित्य बिड़ला कैपिटल ने वित्त वर्ष 2026 की तीसरी तिमाही में शानदार प्रदर्शन किया। कंपनी का कुल मुनाफा पिछले साल की तुलना में 41% बढ़कर 983 करोड़ रुपये हो गया। कमाई भी 30% बढ़कर 14,181 करोड़ रुपये पहुंच गई। यह वृद्धि कर्ज देने के मजबूत कारोबार से आई। गैर-बैंकिंग वित्त कंपनी (NBFC) का कर्ज पोर्टफोलियो 24% और हाउसिंग फाइनेंस कंपनी (HFC) का 58% बढ़ा। कर्ज की गुणवत्ता भी बेहतर हुई है। हाउसिंग फाइनेंस को एडवेंट इंटरनेशनल से 2,750 करोड़ रुपये का निवेश मिला। जीवन बीमा और स्वास्थ्य बीमा कारोबार में भी अच्छी बढ़त रही। कंपनी को अगले तीन साल में NBFC कर्ज में 25% और जीवन बीमा प्रीमियम में 20% से अधिक वृद्धि की उम्मीद है। हालांकि, कर्ज पर ब्याज दरों में सुधार में थोड़ा समय लग सकता है।
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NBFC AUM
₹1.48 lakh crore
+24% YoY
NBFC portfolio grew 24% year-on-year to ₹1,48,182 crore, driven by strong disbursement momentum.
HFC AUM
₹42,204 crore
+58% YoY
Housing finance AUM crossed ₹40,000 crore milestone, growing 58% YoY with monthly disbursements exceeding ₹2,250 crore.
Life Insurance VNB Margin
14.2%
+380bps YoY
Value of new business margin expanded 380 basis points year-on-year to 14.2%, driven by favorable product mix.
HFC ROA
1.96%
+54bps YoY
Return on assets for housing finance improved 54 basis points year-on-year to 1.96%, nearing guided range.
What Changed vs Last Quarter
NEW
NBFC loan book to double in 3 years (~25% CAGR)
Management guided for NBFC AUM growth of 24-25% annually, aiming to double the loan book in three years.
NEW
NBFC ROA expansion to ~2.5% in 4-5 quarters
NBFC business aims to expand ROA to approximately 2.5% over the next four to five quarters, from current 2.25%.
NEW
HFC ROA target of 2.1-2.2% to be achieved earlier than guided
Housing finance expects to reach its targeted ROA range of 2.1-2.2% ahead of the original 6-8 quarter timeline, given strong progress.
UPDATED
Life insurance individual FYP CAGR of 20%+ for 3 years
Life insurance business targets 20%+ CAGR in individual first year premium over the next three years, with VNB margin expansion to 18%+.
DROPPED
HFC ROA target of 2-2.2% over next 8 quarters
Management expects housing finance ROA to improve to 2-2.2% in the next 8 quarters, driven by operating leverage and scale.
DROPPED
Life insurance net VNB margin expansion to 18%+ for FY26
Net VNB margin guidance of 18%+ for FY26, up from 7.5% in Q1, driven by product mix and rider attachments.
DROPPED
Credit cost expected to remain in similar range for FY26
NBFC credit cost of 1.3% in Q1 is expected to be maintained for the full year, reflecting stable asset quality.
NEW RISK
NBFC yield improvement may take longer
Despite favorable mix shift towards unsecured lending, management indicated it will take a couple of quarters for yields to improve at the portfolio level, potentially delaying NIM expansion.
NEW RISK
ECL model reset risk from peers
Analysts raised concerns about potential ECL model changes after a peer increased provisions; management downplayed the need, but regulatory nudges could alter provisioning requirements.
NEW RISK
GST impact on insurance margins
Life insurance margins face headwinds from GST changes; only 40% of the impact has been mitigated via commercial arrangements, with the balance to be managed through product strategy.
NEW RISK
Housing finance capital infusion timeline uncertainty
The ₹2,750 crore capital infusion from Advent International is subject to CCI approval, expected by end of March 2026, but any delay could slow growth plans.
RISK GONE
Unsecured MSME stress may persist
Small-ticket unsecured MSME loans (1.3% of portfolio) show elevated stress with GNPA at 5.4%, though management is cautious and has tightened underwriting.
RISK GONE
NIM compression in NBFC due to product mix
Net interest margin including fees fell to 5.97% as higher-yielding unsecured segments were curtailed; recovery depends on growth in personal/consumer loans.
RISK GONE
HFC growth may slow due to competition and rate cuts
Analyst raised concern about balance transfer out in prime housing loans amid repo rate cuts; management acknowledged elevated foreclosures but expects balanced growth.
RISK GONE
Life insurance group traditional fund business decline
Group traditional fund premium declined 51% YoY strategically due to falling interest rates, impacting total premium and opex ratio.
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Guidance and risk preview
Management guided for NBFC AUM growth of 24-25% annually, aiming to double the loan book in three years.
Despite favorable mix shift towards unsecured lending, management indicated it will take a couple of quarters for yields to improve at the portfoli...
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