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Informist, Monday, Aug. 4, 2025

--Aditya Birla Capital: Uncertainties in small-ticket MSME loans persist 

--CONTEXT: Comments by Aditya Birla Capital mgmt in post-earnings analyst call 

--Aditya Birla Capital: Remain cautious on unsecured portfolio 

--Aditya Birla Capital: Expect credit cost to remain near 1.3% in FY26 

--Aditya Birla Capital: Growth in insurance continues to be strong 

By Gowri Lakshmi and Kabir Sharma 

MUMBAI – Aditya Birla Capital Ltd. continues to be cautious on the unsecured portfolio's growth due to uncertainties arising from domestic macroeconomic conditions, the company's top management said Monday. The management will maintain a cautious approach to underwriting norms in the medium, small, and micro enterprises segments, they said. The secured small and medium enterprises and corporate mid-market segments continue to show steady growth. 

"Disbursement in unsecured loans to SMEs grew by 1% year-on-year and declined 8% sequentially. The secured business loans to SMEs grew by 27% year-on-year and 4% sequentially. The corporate and mid-market portfolio grew by 28% year-on-year and 4% sequentially. Our portfolio quality continues to remain stable," the lender's senior management said at a post-earnings analysts concall. 

Aditya Birla Capital's results published on Monday showed the profit for the quarter ended June rose 10% on year to INR 8.35 billion, supported by growth in assets under management and an increase in total income. The company's assets under management rose 20% on year to INR 5.54 trillion in the reporting quarter and the total income rose 9.3% on year to 95.31 billion. 

The company expects its credit cost to remain near 1.3% in 2025-26 (Apr-Mar) while growth in the insurance sector remains strong. "Looking ahead, we remain optimistic about the long-term growth prospects of the health insurance sector. We continue to have large tailwinds. The differentiated business models will help us grow and realign the market," the management said. In the life insurance segment, individual first-year premium rose 23% on year to INR 7.95 billion in Apr-Jun while health insurance gross written premium rose 30% on year to INR 13.57 billion for the same period. 

The non-banking finance arm's disbursements were INR 158.51 billion as of Jun. 30, up 18% on year. The housing finance business saw a substantial surge, with disbursements surging 76% on year to INR 54.04 billion, as of Jun. 30. The management said the current global macroeconomic environment remains uncertain due to tariff-related developments and geopolitical tensions arising from it. 

On Monday, shares of the company rose 10.7% to INR 278.45 on the National Stock Exchange. The company announced results for the June quarter during market hours. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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