MOSL: ADITYA BIRLA CAPITAL (Buy)-Improving AMC profitability-superior asset quality
Aditya Birla Capital: Improving AMC profitability; superior asset quality
(ABCAP IN, Mkt Cap USD4.5b, CMP INR141, TP INR200, 41% Upside, Buy)
- Aditya Birla Capital Ltd. (ABCL) reported a healthy quarter, with consol. PAT growing 26% YoY to INR2.15b. PAT from established businesses grew 36% YoY to INR2.88b. The quarter was marked by strong growth across business segments and a sharp improvement in the VNB margin in the life insurance segment.
- NBFC segment: Loan book grew 3%/23% QoQ/YoY to INR444b. Despite the pressure on cost of funds, margins (incl. fee income) were largely stable (4.88% v/s 4.84% in previous quarter). This is attributable to a mix shift toward retail lending, which is higher-yielding than corporate lending. However, C/I ratio increased 400bp YoY to 32% due to this mix shift. PAT in this segment grew 35% YoY to INR2.24b. GNPL ratio was largely stable QoQ at 95bp, with PCR at 56%. In addition to Stage 3 provisions of INR2.34b, ABCAP has Stage 1 & 2 provisions of INR2.13b outstanding too. Retail + SME now comprise 48% of the loan book v/s 41% in the year-ago period. RoA/RoE for the quarter was 2.1%/15.2%.
Aditya Birla Capital Ltd. Aditya Birla Capital Limited, formerly Aditya Birla Financial Services Limited, is an investment company. The Company, through its subsidiaries, provides financing, investment, protection and advisory services to its customers and clients. Its financing services include lending, financing and wealth management solutions, customized solutions in areas of personal and business loans, corporate finance, mortgages, capital market based lending, housing finance solutions such as home loans, home improvement and construction loans. Its investment services include asset management services, investment solutions, portfolio management services, investment advisory services and securities broking. Its protection services include protection solutions, children's future solutions, wealth with protection solutions, health and wellness solution, and health insurance. Its advisory services include insurance broking and risk advisory solutions to companies and individuals.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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