Analyst Concall
Aditya Birla Cap sees growth in yld, margin of NBFC business
This story was originally published at 20:06 IST on 13 May 2025
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--Aditya Birla Cap: Expect CAGR of 25% for NBFC over next 3 yrs
--CONTEXT: Comments by Aditya Birla Cap's mgmt at post-earnings analyst call
--Aditya Birla Cap: Expect to see expansion in ylds, margin of NBFC business
--Aditya Birla Cap: Will double NBFC loan portfolio in next 3 yrs
--Aditya Birla Cap: Comfortable with capital adequacy ratio of 16-17%
--Aditya Birla Cap: Looking at sustained credit cost in FY26
By Sachi Pandey
MUMBAI – Aditya Birla Capital Ltd. expects yields and margins of its non-banking finance business to improve in 2025-26 (Apr-Mar), driven by a shift in the loan mix, the company's management said during a post-earnings conference call with analysts on Tuesday. "Our NBFC yields were stable at 12.9% in Q3 (Oct-Dec) and Q4 (Jan-Mar), and margins expanded from 6.00% to 6.07%," the management said. "We were slightly ahead in terms of the market, in terms of taking corrective actions. We strengthened and tightened our underwriting, and that's the reason...you will see expansion as this segment grows, the expansion in terms of the yields and the margin."
The company also aims to grow its NBFC business at a compounded annual growth rate of 25% over the next three years. "We will double our NBFC loan portfolio in the next three years," the management said. As of Mar. 31, the assets under management of the NBFC arm of the company--Aditya Birla Finance--stood at INR 1.26 trillion.
The company further said it remains comfortable with a Tier-I capital adequacy ratio of 14.3% and overall adequacy ratio of 16–17%. "We have sufficient headroom to raise capital, and there are no concerns around growth capital requirements," the management said.
Aditya Birla Capital is also looking at stable credit costs in FY26. "We have strengthened underwriting and added criteria like leverage checks to the scorecard," the management said. "We're tracking bounce rates and cohorts closely and have ramped up pre-emptive collection efforts." The company expects these measures to keep credit costs contained over the coming year.
The credit cost of the NBFC subsidiary of the company was at 1.31% for FY25.
For the quarter ended March, the company posted a 22% jump in the consolidated net profit to INR 8.65 billion from INR 7.08 billion in Oct-Dec. However, the consolidated net profit declined nearly 31% from INR 12.45 billion in Jan-Mar last year.
On Tuesday, shares of Aditya Birla Capital ended at INR 204.89 on the National Stock Exchange, down 0.3% from the previous close. End
Edited by Tanima Banerjee
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