Aditya Birla Capital Limited — Q3 FY26 earnings call

Call held 3 Feb 2026

Management summary

Aditya Birla Capital delivered a strong Q3 FY26, marked by significant growth in its lending businesses and asset management. Consolidated PAT rose 41% YoY, driven by robust portfolio expansion in NBFC and HFC, and healthy AUM growth in AMC. A strategic capital infusion in ABHFL by Advent International will bolster its growth trajectory. While profitability metrics improved across segments, the full impact of NIM expansion in NBFC is anticipated in the coming quarters.

Highlights

  • Consolidated PAT (excl. exceptional/one-off) increased by 41% YoY and 15% QoQ to ₹983 crores.

  • Total consolidated revenue grew by 30% YoY and 14% QoQ to ₹14,181 crores.

  • NBFC portfolio grew by 24% YoY to ₹1.48 lakh crores, with PAT up 29% YoY to ₹772 crores.

  • HFC portfolio grew by 58% YoY to ₹42,204 crores, with PBT up 109% YoY to ₹229 crores and RoA at 1.96%.

  • ABSLAMC overall Average Assets under Management grew 20% YoY to ₹4.81 lakh crores, with PMS/AIF/Advisory assets expanding 8 times.

  • Life Insurance individual first year premium grew 19% YoY, and VNB margin expanded by 380 bps to 14.2%.

  • Health Insurance gross written premium grew 39% YoY, and combined ratio improved to 111% from 114% in 9M FY25.

Concerns

  • NBFC NIM improvement is expected to take a couple more quarters to reflect due to the large portfolio size and ongoing recalibration.

  • Health Insurance business reported a net loss of ₹178 crores for 9M FY26 under new accounting regulations, though an improvement from the previous year.

Key financials

  1. Consolidated PAT (excl. exceptional/one-off) ₹983 Cr +41%YoY
  2. Consolidated Revenue ₹14,181 Cr +30%YoY
  3. Standalone PAT (excl. exceptional/one-off) ₹749 Cr +24%YoY

What they filed

Q1 FY27: revenue up 24.4%, net profit up 32.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4,158 3,792 3,853 4,010 4,507 +8%4,384 +16%4,572 +19%4,990 +24%
EBITDA3,718 3,505 3,795 3,850 4,001 +8%4,307 +23%— —
Net profit1,032 613 654 676 916 −11%740 +21%777 +19%893 +32%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • NBFC
    ₹1.48L Cr AUM₹21,417 Cr Disbursements₹772 Cr PAT6.1% NIM (incl. fee)2.3% RoA1.2% Credit Cost2.8% Overall GS2+GS344.3% Stage 3 PCR
  • HFC
    ₹42,204 Cr AUM₹6,165 Cr Disbursements₹229 Cr PBT2% RoA14.9% RoE95% Stage 2 & 37.4% Cost of Borrowing
  • AMC
    ₹4.81L Cr Overall Average AUM (incl. alternate assets)₹4.43L Cr Mutual Fund quarterly average AuM₹2.00L Cr Equity mutual fund quarterly average AuM₹32,663 Cr PMS/AIF/Advisory assets₹562 Cr Total Revenue from Operations₹358 Cr PBT₹270 Cr PAT
  • Life Insurance
    — Individual First Year Premium14.2% VNB Margin₹15,471 Cr Total Premium (first 9M)— Renewal Premium Growth₹1.10L Cr ABSLI AUM14.6% Net Margins
  • Health Insurance
    ₹4,651 Cr Gross Written Premium (9M FY26, 1/N basis)14.2% Market Share in SAHI₹178 Cr Net Loss (9M FY26, new accounting)111% Combined Ratio (9M FY26, new accounting)

Capital allocation

high confidence
  • M&A Aditya Birla Housing Finance Ltd (ABHFL) Divestment · Announced · Consideration ₹[object Object] (cash) · AUM ₹19,250 Cr

    Strengthen ABHFL's balance sheet for next phase of growth, gain market share, and improve profitability.

    Primary capital infusion of ₹2,750 crores from Advent International, valuing ABHFL at ₹19,250 crores on a post-money basis. ABCL will hold about 85.7% and Advent International will hold about 14.3% stake.

    I am happy to share that the Board of Directors of Aditya Birla Capital and Aditya Birla Housing Finance at their meetings today approved a proposal for primary capital infusion of 2,750 Crore Rupees in ABHFL from one of the entities of Advent International subject to requisite approvals. The transaction announced today values ABHFL at 19,250 crore Rupees on a post-money basis. Upon completion of the transaction, ABCL will hold about 85.7% and Advent International will hold about 14.3% stake in ABHFL.
  • Liquidity Liquidity disclosed The ₹2,750 crores capital infusion in HFC will cover growth capital requirements for the next 2 to 2.5 years. ABCL's standalone capital adequacy is 17.34%. AMC business continues to pay dividends and does not need capital. Insurance businesses have JV partners committed to supporting growth needs.
    For the second question, Rs. 2,750 crores in housing finance will take care of our growth capital requirements for the next 2 to 2.5 years. For rest of the businesses, on a stand-alone basis, our total capad right now is at 17.34%. Our AMC business continues to pay dividends. It does not need any capital. In the insurance business, as we have said earlier, we have a JV partner who is equally committed to supporting the growth need.

Guidance & targets

Loan Book Growth

  • NBFC Loan Book Growth Loan Book Growth · next 3 years · High confidence 24%-25%
    For NBFC, we have grown 24% year-on-year. Our guidance is in the similar range of 24%- 25%. We have guided that we will double our loan book in 3 years. That means 25% growth is what we're looking at.

    — Rakesh Singh

Profitability

  • NBFC RoA Profitability · next 4-5 quarters · Medium confidence closer to 2.5%
    And ROA for the NBFC business, I think if we look at excluding the one-off of the labor code impact, it's almost 2.28%. We are looking at expanding it closer to 2.5% in the next 4-5 quarters.

    — Rakesh Singh

  • HFC RoA Profitability · earlier than 6-8 quarters from March 2025 · Medium confidence 2.1%-2.2%
    But I think given the progress that we've made both on scale and profitability, and you would have seen the numbers, the ROA has grown consistently 1.46% was the ROA for FY25. And right throughout the 3 quarters, we have been consistently moving this up. And now we've reached 1.96% on Q3. But overall, on a full year basis, roa is at 1.8%. But like I said earlier, I think given the progress that we've made on both scale and profitability, we believe we could achieve this slightly earlier than the guided timestamp.

    — Pankaj Gadgil

  • Life Insurance VNB Margins Profitability · next 3 years · High confidence 18%+
    Whilst achieving this growth we intend expanding our current VNB margins of 18%+ and in absolute numbers double the value of our Net VNB in 3 years' time.

    — Kamlesh Rao

Credit Cost

  • NBFC Credit Cost Credit Cost · ongoing · High confidence 1.2-1.3%
    Our credit costs have reduced by 13 bps year-on-year to 1.23% for the quarter which is well within the guided range of 1.2 - 1.3%. Going forward, we remain confident to maintain the credit cost in the same range at the company level.

    — Vishakha Mulye

Premium Growth

  • Life Insurance Individual FYP Growth Premium Growth · next 3 years · High confidence 20%+
    Our guidance continues to grow Individual FYP at a CAGR of 20%+ for the next 3 years.

    — Kamlesh Rao

What to watch in Q4 FY26

HFC Capital Infusion Completion

end of March/early April
Current CCI approval pending for Advent International investment
Target Transaction closed

Why it matters

Completion of this capital infusion is crucial for ABHFL's balance sheet strength and future growth plans.

We believe that CCI will take about 45 days to grant approval and the approval should come by end of March. And once the CCI approval comes, the transaction will be closed.

Risks & concerns

  • NBFC NIM compression/slower improvement

    medium

    Yield improvement from product mix calibration will take a couple more quarters to reflect due to the large portfolio size.

    Analyst acknowledged

  • Health Insurance Net Loss

    low

    Net loss of ₹178 crores for 9M FY26 under new accounting regulations, though improving YoY.

    Management acknowledged

  • GST Impact on Life Insurance VNB Margins

    low

    GST impact in H2 FY26 affected net VNB margins, with 40% resolved and remaining being managed through product strategy.

    Management acknowledged

Q&A highlights

4 direct, 1 evasive
HFC Capital Infusion Timeline and Future Capital Needs Direct
We believe that CCI will take about 45 days to grant approval and the approval should come by end of March. And once the CCI approval comes, the transaction will be closed. At the same time, I mean, whether it comes end of March or it comes in the week of April, we are sufficiently capitalized for the time being in the housing finance company. ... Rs. 2,750 crores in housing finance will take care of our growth capital requirements for the next 2 to 2.5 years.

Clarifies the timeline for the Advent International investment and confirms its sufficiency for HFC's near-term growth, while also addressing overall capital adequacy for ABCL.

Asked by Chintan Shah

NBFC NIM Trajectory and Yield Improvement Partial
Until quarter 1, we were calibrating our personal consumer and unsecured business. Post that, if you see the growth has come back quite strongly. It will take a couple of more quarters for the yield to improve at a company level and the portfolio level and that should result in an improvement in margin as well.

Explains that despite current margin improvements, the full impact of product mix calibration on yields will take more time to reflect due to the large portfolio size, indicating a slower realization of yield benefits.

Asked by Chintan Shah

NBFC Credit Cost and Provisioning Adequacy Direct
If you look at it in our growing book, if you look at both Stage 2 and Stage 3 have come down significantly. ... I think that credit profile and the credit performance looks quite stable and good. We don't think we need it at this point in time. Also, as you know, 73% of our exposures are secured by collaterals and 82% of our exposure to MSMEs is secured by collateral. So, we don't think we need any enhancement of provision coverage at this point in time.

Reassures analysts about the stability of asset quality and provisioning, indicating no immediate plans for additional buffers or ECL model resets despite external uncertainties.

Asked by Chintan Shah

NBFC Yield Profile and NIM Drivers Partial
So, as I mentioned, it will take a couple of quarters. Within the personal and consumer and also unsecured business, we have been cutting down a high risk and wherever the portfolio has not been stacking up. We have been recalibrating our unsecured portfolio over the last 18 months or so. So high-risk segment across our personal and consumer and unsecured business, we are cutting off.

Reinforces that yield improvement is a lagging indicator of portfolio recalibration, as the company has actively de-risked certain segments, which impacts immediate yield uplift.

Asked by Gaurav

NBFC ECL Breakdown Disclosure Evasive
So far, we have not shared this, and we will see at what point of time this information can be shared. I think you can clearly see that staging has improved. This is all basis the portfolio performance basis the ECL model. So, I think that's what drives our PCR.

Management declined to provide a detailed breakdown of ECL by stage, limiting transparency on the granular movement of asset quality components.

Asked by Gaurav

NBFC ECL Reset and Assumptions Direct
So again, if you look at our portfolio quality, it's very stable. And especially the MSME segment where the issues will raise, 82% of our exposure is secured. This is secured by cash flows and collaterals. So, we don't expect anything at this point in time.

Directly addresses concerns about potential ECL resets or changes in PD/LGD assumptions, affirming the stability of their portfolio and current models.

Asked by Gaurav

NBFC Unsecured Business Provision Coverage Direct
If you look at our personal and consumer segment, we have a provision cover of 68.1%. Our unsecured business is almost 45%. And here, almost 40% of this portfolio is backed by the credit guarantee. Taking this into account, both unsecured portfolios are well provided and well covered.

Provides specific provision coverage ratios for unsecured segments and clarifies the role of credit guarantees, addressing analyst's comparison to peers.

Asked by Abhijit Tibrewal

NBFC Unsecured Business Disbursement Moderation Partial
The reason why sequentially is looking slightly down is because we don't include the line of credit products or supply chain where there's a high churn in the reported disbursements. If we include that, I think our disbursement will be much higher sequentially as well. But you should look at the AUM growth.

Explains that sequential moderation in unsecured business disbursements is partly due to reporting methodology excluding high-churn products, suggesting AUM growth is a more accurate indicator.

Asked by Abhijit Tibrewal

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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.

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