Detailed Narrative
Strong Consolidated Performance and Revenue Growth
Aditya Birla Capital reported a robust Q3 FY26, with consolidated profit after tax (excluding exceptional and one-off📎 items) increasing by 41% year-on-year and 15% sequentially to ₹983 crores. The company's total consolidated revenue grew significantly by 30% year-on-year and 14% sequentially, reaching ₹14,181 crores. This strong performance underscores the company's focus on driving quality and profitable growth across its diverse financial services portfolio.
Strategic Capital Infusion in Housing Finance Business
A landmark development in Q3 FY26 was the Board's approval for a primary capital infusion of ₹2,750 crores into Aditya Birla Housing Finance (ABHFL) from Advent International. This transaction, which values ABHFL at ₹19,250 crores on a post-money basis, is expected to close by the end of March or early April, pending CCI approval. This capital will support ABHFL's growth requirements for the next 2 to 2.5 years, enabling it to sustain momentum, gain market share, and improve profitability.
Robust Growth and Improving Profitability in Lending Businesses
The NBFC business saw its AUM grow by 24% year-over-year to ₹1.48 lakh crores, with disbursements up 41% YoY to ₹21,417 crores. PAT for the NBFC segment grew 29% YoY to ₹772 crores, and its RoA stood at 2.25%. The HFC business demonstrated exceptional growth, with its portfolio expanding 58% YoY to ₹42,204 crores and PBT surging 109% YoY to ₹229 crores. HFC's RoA improved significantly by 54 bps YoY to 1.96%.
Strong Asset Quality and Provisioning
Both lending businesses maintained strong asset quality. The NBFC's overall Gross Stage 2 and 3 ratios declined by 150 bps YoY to 2.8%, with a Stage 3 PCR of 44.3%. Credit costs for the NBFC reduced by 13 bps YoY to 1.23%, remaining within the guided range of 1.2-1.3%. HFC's Stage 2 & 3 ratios also improved, reducing by 82 bps YoY to 0.95%, reflecting best-in-class asset quality and effective risk management.
Asset Management Business Expansion and Fund Performance
Aditya Birla Sun Life AMC (ABSLAMC) reported a 20% year-on-year growth in its overall Average AUM (including alternate assets) to ₹4.81 lakh crores. Mutual Fund quarterly average AUM reached ₹4.43 lakh crores, up 15% YoY, supported by ₹1,080 crores in monthly SIP contributions. The PMS/AIF/Advisory assets experienced substantial growth, expanding eightfold from Q3 FY25 to ₹32,663 crores, driven by strong organic momentum and improved fund performance.
Growth and Margin Expansion in Insurance Businesses
The life insurance business achieved a 19% year-over-year growth in individual first year premium, with its VNB margin expanding by 380 bps to 14.2%. The health insurance business recorded a robust 39% year-on-year growth in gross written premium. Despite GST changes, the combined ratio for health insurance improved to 111% from 114% in 9M FY25, reflecting better unit economics and the success of its 'Health First' model.
Digital and Technology-Driven Strategy
Aditya Birla Capital continues to prioritize digital and technology adoption across its businesses. ABHFL migrated to the ABC Stellar platform to enhance channel onboarding and engagement, and its FinCollect platform drove an 82 bps reduction in Stage 2+3. The NBFC is leveraging proprietary digital platforms like ABCD App and Udyog Plus for direct sourcing, while insurance businesses are increasing digital adoption for customer onboarding and services, with 83% of renewal premiums collected digitally in life insurance.