ICICI Securities Recommends Buying Aditya Birla Capital, Targets Price of Rs 420

Aditya Birla Capital Delivers Robust Performance in Lending Businesses

Aditya Birla Capital, a leading financial services company, has reported a robust performance in its lending businesses for the quarter ended March 2026. The company's Non-Banking Financial Company (NBFC) and Housing Finance Company (HFC) businesses delivered a Return on Assets (RoA) of 2.3% and 2.1%, respectively, in the fourth quarter of fiscal year 2026. This performance is a testament to the company's strong execution and ability to drive industry-leading growth and cost efficiencies.

Key Highlights

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The company's HFC business continues to lead the industry in terms of growth, with stable asset quality metrics. With the recent deal with Advent, growth capital is expected to flow into the HFC business, positioning it well to sustain its growth momentum over the next two fiscal years. We believe that the HFC business can achieve a compound annual growth rate (CAGR) of over 30% between fiscal years 2026 and 2028.

Outlook and Recommendation

Given the robust performance in the lending businesses and a steady outlook, we retain our BUY recommendation for Aditya Birla Capital. Our revised Sum of the Parts (SoTP)-based target price for the company is INR 420, up from INR 400 earlier. We believe that the company's strong execution and growth potential make it an attractive investment opportunity for investors.