What Led to Aditya Birla Capital's 13% Drop in Q2 Net Profit?
Click to start listening
Synopsis
Aditya Birla Capital Limited reports a decline in its Q2 net profit, highlighting a complex financial landscape. Despite challenges, the company showcases growth in revenue and assets, driven by its diversified portfolio and strengthening digital platforms. Explore the details of this financial report and its implications for the market.
Key Takeaways
- 13% YoY decline in net profit to Rs 882.5 crore.
- 4% YoY revenue growth to Rs 12,481 crore.
- 14% increase in NBFC disbursements to Rs 21,990 crore.
- Digital platform ABCD has onboarded over 76 lakh customers.
- AUM for financial services rose 10% YoY to Rs 5.5 lakh crore.
Mumbai, Oct 30 (NationPress) Aditya Birla Capital Limited (ABCL) disclosed a 13 percent year-on-year (YoY) decline in its consolidated net profit, amounting to Rs 882.5 crore for the September quarter (Q2 FY26), down from Rs 1,015 crore during the same timeframe last fiscal (Q2 FY25).
The previous year's figures included a one-time gain of Rs 167 crore, as per the company's filing with the stock exchange.
The consolidated revenue for the company experienced a 4 percent year-on-year increase, reaching Rs 12,481 crore, while the consolidated profit saw a 3 percent rise to Rs 855 crore.
Despite the profit reduction, shares of Aditya Birla Capital showed an upward trend, trading more than 5 percent higher at Rs 327, marking an increase of Rs 16.20 by 3:30 pm.
The non-banking financial company (NBFC) segment of Aditya Birla Capital reported robust growth, with disbursements escalating 14 percent year-on-year and 39 percent sequentially to Rs 21,990 crore.
Assets under management (AUM) for the NBFC surged 22 percent year-on-year and 6 percent quarter-on-quarter to Rs 1.39 lakh crore, while the overall loan portfolio expanded 29 percent to Rs 1.78 lakh crore.
In the financial services sector, which encompasses asset management and insurance, the total AUM rose 10 percent year-on-year to Rs 5.5 lakh crore.
This growth can be attributed to consistent investor inflows across both retail and institutional sectors.
The company noted that its diversified offerings in lending, insurance, and asset management continue to foster steady growth, even amid a high interest rate climate.
As part of the Aditya Birla Group, Aditya Birla Capital also underscored the strengthening of its digital platforms.
The direct-to-consumer platform, ABCD, provides over 26 financial products and services, including payments, loans, insurance, and investments.
As of September 30, the platform has successfully onboarded more than 76 lakh customers.
Meanwhile, its B2B initiative, Udyog Plus, which serves the MSME ecosystem by offering digital solutions for business loans and supply chain financing, reported an increase in registrations to 24 lakh, with an AUM of Rs 4,397 crore.
Point of View
It is evident that while the company faces challenges with a decrease in net profit, it also demonstrates resilience through revenue growth and strong performance in its NBFC segment. This dual narrative reflects the complexities of the current market, emphasizing the importance of a diversified portfolio.
NationPress
01/11/2025
Frequently Asked Questions
What is the reason for the decline in Aditya Birla Capital's net profit?
The net profit fell due to a high base effect from the previous year, which included a one-time gain of Rs 167 crore.
How did the company's revenue perform in Q2?
Aditya Birla Capital reported a 4% year-on-year increase in consolidated revenue, reaching Rs 12,481 crore.
What was the performance of the NBFC arm?
The NBFC arm reported a growth in disbursements by 14% year-on-year, with an AUM growth of 22%.
How has the digital platform performed?
The direct-to-consumer platform, ABCD, has onboarded over 76 lakh customers, offering over 26 financial products and services.
What is the outlook for Aditya Birla Capital?
Despite the profit decline, the company's diversified portfolio and strong digital presence suggest a positive outlook for future growth.
