MOSL: Aditya Birla Capital (Buy) - Robust growth; Asset quality intact
Aditya Birla Capital: Robust growth; Asset quality intact
(ABCap IN, Mkt Cap USD5.4b, CMP INR160, TP INR215, 34% Upside, Buy)
- Aditya Birla Capital (ABCL) reported a healthy quarter, with consolidated PAT growing 91% YoY to INR2.08b (PBT up 66% YoY). The quarter was marked by strong growth in all business segments and a sharp improvement in persistency in the life insurance segment.
- NBFC segment: Loan book grew 9%/25% QoQ/YoY to INR432b. Margins (incl. fees) were under some pressure (-30bp YoY to 4.3%) due to a 70bp YoY decline in yields. Management continues focusing on retail and SME segments, the share of which is currently at 47%. Overall, profitability for the full year was intact, with RoA/RoE at 1.9%/14%. ABCAP recognized 20bp NPLs stemming from the RBI’s Feb 12th circular, as a result of which, GNPL ratio stands at 92bp.
- AMC segment: While overall AAUM grew 27% YoY to INR2.7t, equity AAUM rose by a stupendous 73% YoY to INR865b. Equity now forms 32% of AAUM compared to 24% a year ago. With a reduction in operating costs on a YoY basis, PBT was up 62% YoY to INR1.4b. ABCAP continues expanding in B-15 cities, with AAUM from those places reaching INR401b (9.4% market share).
- Others: 1) HFC loan growth remains robust (+21% QoQ to INR81b); the share of home loans continues inching up (+300bp QoQ to 63%). 2) HFC margin shrunk 60bp YoY to 2.8%. 3) 13th month persistency (cum.) improved 300bp QoQ to 75%. 4) Product mix continues to migrate toward ULIPs, with the share of ULIP/PAR/Non-PAR/Protection at 39%/24%/32%/5%.
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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