Aditya Birla Cap

Aditya Birla Capital reported a 3% year-on-year increase in consolidated profit after tax to ₹855 crores and a 4% year-on-year revenue growth to ₹12,481 crores in Q2 FY26. The company's strategy revolves around driving quality and profitable growth by leveraging data, digital, and technology. A customer-centric approach provides seamless financial solutions, supported by prudent risk management and a strengthening omnichannel distribution network, including digital platforms and branches.

The NBFC business demonstrated strong performance with disbursements increasing 39% sequentially to ₹21,990 crores, and the overall portfolio growing 22% year-on-year to ₹1.4 trillion. Personal and consumer loan disbursements grew 26% sequentially to ₹4,970 crores, while unsecured business loan disbursements rose 37% sequentially to ₹1,500 crores. Asset quality remained robust, with Gross Stage 2 and 3 loans declining by 67 bps sequentially to 3.03%, and a provision coverage ratio of 44.2% for Stage 3 assets. The segment's profit after tax grew 14% year-on-year to ₹714 crores, achieving an RoA of 2.20%.

The HFC segment continued its strong growth trajectory, with disbursements increasing 44% year-on-year to ₹5,786 crores, leading to a 65% year-on-year portfolio growth to ₹38,270 crores. The business is experiencing significant operating leverage, with opex-to-assets improving by 20 bps sequentially to 2.39%. This contributed to an increase in RoA by 23 bps sequentially to 1.82% and RoE by 168 bps to 13.95%. Asset quality remains strong, with Stage 3 loans declining to 0.61% and a provision coverage ratio of 57.6%.

The Asset Management business achieved an average AUM of over ₹4.25 trillion, growing 11% year-on-year and 5% sequentially. Equity AUM increased 7% sequentially to ₹1.92 trillion. The segment saw significant growth in its Alternatives business, with PMS/AIF assets surging 8x to ₹30,250 crores from Q2 FY25. Passive AUM also grew 20% year-on-year to ₹36,000 crores. The operating profit for the segment grew 13% year-on-year to ₹270 crores, with profit after tax at ₹241 crores.

The life insurance business reported a 19% year-on-year growth in individual first-year premium in H1 FY26, increasing its market share to 4.9%. Net VNB margin improved by 420 bps year-on-year to 11.6% in H1 FY26. The health insurance business grew gross written premium by 31% year-on-year in H1 FY26, with a combined ratio of 108%. However, the recent GST exemption on life and health insurance products is expected to cause short-term margin pressure due to the inability to reprice products and loss of input tax credits, though management is confident of achieving over 18% VNB margin for life insurance and improving the combined ratio for health insurance in FY26.

Aditya Birla Capital is heavily investing in and leveraging its digital platforms. The D2C platform, ABCD, which went live a year ago, has already achieved over 7.6 million customer acquisitions. The B2B platform for MSME ecosystem, Udyog Plus, now contributes about 32% of the AUM of unsecured business loans. The company also expanded its branch network by 22 during the quarter, reaching 1,712 branches across all businesses, with a focus on penetrating tier 3 and 4 towns and new customer segments.