Key Highlights of the 3QFY25 Result
3QFY25 Result Highlights
Revenue stood at Rs 10,949 cr, growing at 10% on a YoY basis. PAT declined 4% YoY to Rs 708 cr. Lending AUM stood at Rs 1.46 tn with a growth of 27% YoY. Total AUM stood at Rs 5 tn growing at 23% YoY. NBFC/Housing/AMC AUM stood at Rs 1.2 tn/Rs 26,714 cr/Rs 3.8 tn growing at 21%/62%/23% YoY respectively. Gross Stage 3 for NBFC/Housing stood at 2.27%/0.99% v/s 2.50%/1.30% on a QoQ basis. Life Insurance: Insurance premium stood at Rs 2,595 cr grew 31% YoY. VNB margin stood at 10.8%. Health insurance: Gross written premium grew by 39% YoY to Rs 3,337 cr. Combined ratio stood at 114% while market share stood at 12% up 138 bps YoY.
Reiterate BUY with Price Target Rs 280/-
The company has shown stable performance due to elevated credit costs which the management is confident to improve in coming quarters. NBFC business saw margin compression due to a shift towards secured loans. Management has reiterated its guidance on both growth and credit cost fronts. We expect the lending businesses both Aditya Birla Finance Ltd. & Aditya Birla Housing Finance Ltd. to grow at 30% YoY each in FY25E & FY26E. For Aditya Birla Sun Life AMC Ltd, we expect 12-15% YoY growth in AUM in FY25E & FY26E and for Life insurance business, we expect top-line growth at 20%+ CAGR over the next 2 years along with steady VNB margin at 17%-18%. We maintain a buy rating on the company. We value the stock at Rs 280 on a SOTP basis. We have valued the NBFC at 2.0x of its FY26E BV, HFC at 1.8x of its FY26E BV, AMC business at 20x FY26E EPS, ABSLIC at 1.8x of FY24 EV, health insurance is valued based on recent deal value and other companies at 1x current Market cap.
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