On April 2, early morning transactions saw an almost 9 percent increase in Aditya Birla Capital shares. The day before, brokerage Macquarie had begun covering the NBFC, recommending “outperform” with a target price of Rs 230.
The stock was trading at Rs 198.35 at 11:38 a.m.
The firm believes that over the next several years, Aditya Birla Capital (ABCL) would demonstrate robust loan and earnings growth, driven by both its lending (NBFC and HFC) and savings (life insurance) sectors.
Strong parentage, a sizable group ecosystem, and a varied distribution mix enable ABCL to support substantial loan and APE growth that is higher than peers or the average of listed peers.
“In our view, the SME segment, in particular, is expected to show a strong AUM growth over the next three years.”
Report
According to Macquarie analysts, ABCL is the best NBFC option and provides over 30% upside.
The NBFC recorded consolidated revenue of Rs 9,997 crore for the December quarter, up 29% over the prior fiscal year. To reach Rs 736 crore, net profit increased by 39%.
The holding company for the Aditya Birla Group’s financial services operations is Aditya Birla Capital Limited. In order to “create a large unified operating NBFC,” the Aditya Birla Capital board agreed on March 11 the combination of its fully owned subsidiary, Aditya Birla Finance Ltd., with itself.
