Aditya Birla Cap

Aditya Birla Capital reported a robust Q1 FY26, with consolidated profit after tax growing 10% year-on-year to 835 crore Rupees and total consolidated revenue increasing 10% year-on-year to 11,333 crore Rupees. This growth was underpinned by strong performances across its key business segments, demonstrating the company's ability to drive quality and profitable expansion despite global uncertainties. The company emphasized its focus on leveraging data, digital, and technology to enhance customer-centric financial solutions and strengthen its omnichannel distribution network.

The NBFC segment showed significant growth, with disbursements increasing 18% year-on-year to 15,851 crore Rupees in Q1 FY26. The overall NBFC portfolio grew 22% year-on-year and 4% sequentially, reaching 1.31 trillion Rupees. Profit after tax for the NBFC segment grew 11% year-on-year and 6% sequentially to 689 crore Rupees, with a healthy RoA of 2.25%. Management noted proactive interventions in unsecured loan segments, leading to a 28% sequential and 65% year-on-year growth in personal and consumer loan disbursements to 3,947 crore Rupees, while maintaining caution in smaller ticket unsecured MSME loans.

The Housing Finance Company (HFC) business delivered strong growth momentum, with disbursements soaring 76% year-on-year to over 5,400 crore Rupees. This propelled the HFC portfolio to grow 70% year-on-year and 11% sequentially, reaching 34,605 crore Rupees. Profit before tax increased 82% year-on-year to 154 crore Rupees. The HFC segment also demonstrated improved operating leverage, with opex-to-assets improving by 32 bps sequentially to 2.59%, and RoA increasing by 15 bps to 1.59%, with a target of 2-2.2% over the next eight quarters.

Across the NBFC and HFC segments, asset quality remained stable or improved. NBFC's Gross Stage 2 and 3 loans declined by 75 bps year-on-year and 8 bps sequentially to 3.70%, with 74% of the portfolio secured and 41.2% provision coverage on Stage 3 loans. HFC's Stage 3 loans declined by 97 bps year-on-year and 4 bps sequentially to 0.62%. Management highlighted a cautious approach in the smaller ticket size unsecured MSME segment (1.3% of total loan book) due to ongoing uncertainties, but noted that 53% of Stage 3 loans in this segment are covered by government guarantee schemes.

The Asset Management business saw its average AUM grow 14% year-on-year and 6% sequentially, crossing 4 trillion Rupees, with equity AUM up 11% year-on-year. PAT for the AMC grew 18% year-on-year to 277 crore Rupees. In Life Insurance, individual first year premium grew 23% year-on-year, significantly outpacing the private industry average, and net VNB margin expanded by 110 bps to 7.5%. The Health Insurance business continued its rapid growth, with gross written premium increasing 30% year-on-year (40% excluding multi-year guidelines impact), and market share among standalone health insurers rising to 14.5%.

Aditya Birla Capital continues to strengthen its omnichannel distribution network, adding 67 branches during the quarter to reach 1,690 branches across all businesses, focusing on tier 3 and tier 4 towns. The D2C platform, ABCD, has acquired 6.4 million customers, offering a comprehensive portfolio of over 25 products. The B2B platform for MSME ecosystem, Udyog Plus, now contributes about 30% of the AUM of unsecured business loans, with the ABG ecosystem contributing 37% of disbursements on Udyog Plus, showcasing strong digital adoption and ecosystem leverage.