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Informist, Thursday, Oct. 30, 2025

By Vaishali Tyagi

MUMBAI – Aditya Birla Capital Ltd.'s net profit for the September quarter is expected to fall significantly despite a rise in net interest income due to a surge in provisions. The highest estimate for the company's September quarter net profit is INR 7.51 billion from JM Financial Institutional Securities Pvt. Ltd., while the lowest estimate is INR 7.07 billion from ICICI Securities Ltd. Emkay Global Financial Services Ltd. expects company to report a net profit of INR 7.26 billion.

The company is scheduled to release its September quarter results on Thursday. In the June quarter, it posted a 10% on-year rise in consolidated net profit at INR 8.35 billion. However, the June quarter net profit was down nearly 3.4% sequentially. 

ICICI Securities Ltd. expects the company's provisions to rise 27% on year to INR 4.3 billion. Provisions for the June quarter rose to INR 3.99 billion, up 6% on year.

Analysts estimate Aditya Birla Capital's net interest income in a range of INR 17.40 billion, estimated by JM Financial, to INR 21.89 billion, expected by ICICI Securities, with Emkay estimates it at INR 19.60 billion. In the June quarter, the company's NII had grown 9% on year to INR 18.59 billion.

In the June quarter earnings conference call, the company's top management had said Aditya Birla Capital continued to be cautious on growing the unsecured portfolio due to uncertainties from domestic macroeconomic conditions. The management had said it would maintain a cautious approach to underwriting in the micro, small, and medium enterprises segments. The company's unsecured business disbursement was INR 10.90 billion in the June quarter, up 1% on year. However, it was down 8% on a sequential basis. 

Brokerages expect the company's credit cost to remain stable. JM Financial and ICICI Securities expect the credit cost to be 1.3% in the September quarter. In the June quarter, the company's credit cost was 1.2%. 

All three brokerages expect the Aditya Birla group company's disbursements to be strong, driving growth in assets under management. "We expect Aditya Birla Capital's disbursements to register 15% on-year growth, resulting in AUM growth of 21% YoY," Emkay Global Financial Services said. The company's disbursements were at INR 158.51 billion as on Jun. 30, up 18% on year. Assets under management had risen 20% on year to INR 5.54 trillion on Jun. 30. 

Aditya Birla Capital's non-banking finance business is expected to grow, driven by the personal and consumer segments. "We expect a healthy 5% on-quarter growth in NBFC business driven by P&C (personal and consumer segment) while other businesses are expected to grow at the usual run-rate," JM Financial said. The company's personal and consumer loans totalled INR 164.46 billion on Jun. 30, up 2% on year and 6% on quarter.

Brokerages are divided on the company's net interest margin. Emkay Global expects the company's NIM to remain stable at 5.8%, while JM Financial expects it to rise to 6.5%. "Margins likely to inch up as MCLR-linked (marginal-cost-of-funds-based lending rate-linked) borrowings re-price," JM Financial said.

Aditya Birla Capital's bank loans would likely be tied to MCLR, taking a longer time to reprice than the loans it has given out after domestic policy easing. The Reserve Bank of India's Monetary Policy Committee has cut its policy rate by 100 basis points between February and June, the benefit of which lenders have passed on in the June quarter. In the June quarter, the lender's margin stood at 5.97%.

Brokerages expect stability on the operating expenditure front. Operating expenses had risen to INR 1.94 billion in the June quarter from INR 1.36 billion a year ago. 

Shares of the company have risen 12% since the company declared its earnings for the June quarter on Aug. 4. At 1125 IST, the stock was up 0.3% at INR 311.70 on the National Stock Exchange. 

Brokerages have a largely positive view on the company's stock, with all seven brokerages tracking the company recommending a 'buy' rating with an average target price of INR 287 per share. 

Following are the Jul-Sept earnings estimates for Aditya Birla Capital from three brokerages in descending order of the estimate of net profit in INR million:

End

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

Edited by Avishek Dutta

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