Aditya Birla Capital 1Q27: Broad-based growth, profitability continues to improve

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Aditya Birla Capital

1Q27: Broad-based growth, profitability

continues to improve

Reiterate Rating: BUY | PO: 445.00 INR | Price: 404.30 INR

Lending book growth remains strong; AQ resilient

03 August 2026

ABCAP delivered a steady quarter with PAT at INR12bn (+40% YoY). Key highlights: (i)

NBFC: AUM +5% QoQ/+28% YoY with strong disbursement growth of 41%/37% YoY in

personal and consumer loan/ business loan segments. AQ remained resilient with credit

costs flattish at 1.03% with rangebound GS-2+3 (%). NIMs (BofAe) moderated 6bp QoQ

on lower yields; (ii) HFC: AUM growth at +9% QoQ with affordable mix at 39% (vs 38%

QoQ), NIMs expanded 26bp QoQ on lower funding costs aided by recent capital raise.

GS-2+3 remained stable. C/I down 330bp QoQ on operating leverage kicking in from

investments made in the last 2 years; (iii) AMC: AUM +6% YoY with equity mix rising

117bp QoQ to 46.5%; (iv) Life Insurance (LI): margins improved to 15.1% vs 7.5% YoY,

(v) Health Insurance (HI): GWP +50% YoY, Combined ratio at 106% vs 107% YoY.

Equity

Retail/SME momentum continues; GL rollout underway

NBFC growth remains the core investment driver with retail/SME accounting for 72% of

disbursements (vs 68% YoY), highlighting focus on granular and diversified portfolio.

Overall unsecured loan book mix in NBFC business is at 25% in 1Q. which the company

expects to expand in the next few quarters and support yield expansion. ABCAP is

foraying into GL business and is in final stages of operational readiness in identified

locations – expected to go live in 2Q and plans to add 200-300 branches in FY27, with a

medium-term target of 1000 branches. We raise our FY28 earnings forecasts by 7% and

PO by 17% to INR445 as we factor in higher AUM growth, higher non-interest income

and lower provisions in lending business, and revise valuation parameters. Reiterate Buy.

Multiple drivers for profitable growth

We continue to believe that ABG ecosystem provides strong growth opportunity to

ABCAP. For NBFC, share of direct sourcing is rising with strong momentum in

acceptability of Udyog Plus (2.42mn registrations; INR63bn portfolio) and synergies with

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