💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 4% Y-o-Y to Rs. 12,481 Cr in Q2 FY26. NBFC disbursements rose 39% Q-o-Q to Rs. 21,990 Cr, with the portfolio reaching Rs. 1.4 trillion (up 22% Y-o-Y). Housing Finance (HFC) disbursements grew 44% Y-o-Y to Rs. 5,786 Cr. Health Insurance gross premium grew 41% Y-o-Y to Rs. 3,070 Cr in H1 FY26.

Geographic Revenue Split

Not explicitly disclosed as a percentage split, but the company operates a pan-India network with 444 Life Insurance branches and 175 Housing Finance branches as of Q2 FY26 to drive regional penetration.

Profitability Margins

Consolidated PAT grew 3% Y-o-Y to Rs. 855 Cr in Q2 FY26. HFC ROA improved by 22 basis points to 1.82%, and ROE reached 13.95%. NBFC NIM (including fees) stood at 6.06%, up 9 bps Q-o-Q. Health Insurance combined ratio improved to 108% from 113% Y-o-Y.

EBITDA Margin

Not applicable for financial services; however, HFC PBT grew 87% Y-o-Y to Rs. 194 Cr. Operating leverage is improving, with HFC opex-to-assets reducing by 62 bps Y-o-Y to 2.39% and NBFC opex-to-AUM declining 9 bps Y-o-Y to 1.89% in H1 FY26.

Capital Expenditure

Strategic investments in distribution, data, and digital technology were made over the last 2 years. Recent capital raises include Rs. 3,000 Cr in June 2023, with additional inflows of Rs. 588 Cr and Rs. 216 Cr from stake sales in AMC and Insurance Brokerage businesses in FY24-25.

Credit Rating & Borrowing

Maintains a 'AAA' credit rating. Consolidated cost of borrowing improved by 17 bps Q-o-Q to 7.52% in Q2 FY26. Funding mix for HFC shifted significantly with NCDs increasing from 33% to 50% Y-o-Y.

⚙️ Operational Drivers

Raw Materials

As a financial services provider, the primary 'raw material' is the Cost of Funds, which stands at 7.52%. Capital is sourced via NCDs (50% of HFC mix), Bank Term Loans (44% of standalone mix), and Commercial Paper (8%).

Import Sources

Not applicable for financial services; capital is sourced from domestic and international financial markets including banks, mutual funds, and ECBs.

Key Suppliers

Key lenders and investors include various banks, mutual funds, HNIs, and provident funds. Grasim Industries (parent) provides capital support, including Rs. 1,250 Cr in the last raise.

Capacity Expansion

Current distribution capacity includes 444 Life Insurance branches and 175 HFC branches. The company added 17 branches in H1 FY26 and is expanding its digital 'capacity' through the ABCD App and Udyog Plus platform.

Raw Material Costs

Cost of borrowing is 7.52%. Interest expenses are the primary cost, with NIMs maintained at 6.06% in the NBFC segment to ensure a healthy spread over the cost of capital.

Manufacturing Efficiency

Measured by operating leverage; HFC opex-to-assets improved by 62 bps Y-o-Y. Productivity gains are expected as the ratio of disbursements to opening book reduces over time.

Logistics & Distribution

Distribution is driven by the 'ABG Ecosystem,' which accounted for 15.9% of retail disbursements in HFC and ~13% overall, reducing customer acquisition costs.

📈 Strategic Growth

Expected Growth Rate

20-25%

Growth Strategy

Growth will be driven by a 25% CAGR in the HFC portfolio and 20%+ CAGR in Life Insurance Individual FYP. Strategy involves leveraging the 'ABCD' omni-channel app, expanding the MSME-focused 'Udyog Plus' platform, and increasing the share of high-margin retail/SME loans while utilizing the 310 million+ customer base of the Aditya Birla Group ecosystem.

Products & Services

Personal loans, consumer loans, unsecured business loans, MSME loans, affordable housing finance, prime housing finance, construction finance, life insurance policies, health insurance plans, and mutual fund units.

Brand Portfolio

Aditya Birla Capital, ABCD (App), Udyog Plus, Aditya Birla Sun Life, Akshaya Par (Life Insurance), Super Term Plan.

New Products/Services

Launched 'Akshaya Par' (contributing 15% of H1 business) and 'Super Term Plan' in Life Insurance. 'ABCD' app and 'Udyog Plus' are the primary new digital service platforms.

Market Expansion

Expanding into 'emerging locations' with new branches (17 added in H1 FY26) and increasing banca tie-ups (12 total, including Equitas Small Finance Bank).

Market Share & Ranking

Third-largest private HFC in terms of incremental growth. One of the largest AMCs in India with Rs. 4.25 trillion AUM. No. 1 in market share accretion among SAHI players in H1 FY26.

Strategic Alliances

12 Banca tie-ups including BOM, IDFC Bank, Axis Bank, and Equitas Small Finance Bank. Joint ventures exist with Sun Life for AMC and Insurance businesses.

🌍 External Factors

Industry Trends

The industry is shifting toward 'Digital-First' lending and 'Ecosystem-based' sourcing. ABCAPITAL is positioning itself as a 'full-stack' player to capture the 19% industry growth in health insurance and the robust demand for affordable housing.

Competitive Landscape

Competes with major private banks and specialized NBFCs/HFCs. Competitive advantage is maintained through a diversified product suite (Lending, AMC, Insurance) under one umbrella.

Competitive Moat

The primary moat is the 'Aditya Birla Group' brand and ecosystem, providing a low-cost sourcing channel (13-16% of disbursements). This is sustainable due to the massive existing customer base across other group businesses (Grasim, UltraTech, etc.).

Macro Economic Sensitivity

Highly sensitive to RBI interest rate cycles and credit growth in the MSME/Retail sectors. GDP growth directly correlates with the 22% Y-o-Y growth seen in the NBFC portfolio.

Consumer Behavior

Shift toward digital onboarding via apps like ABCD and a preference for 'Health-First' insurance models which ABCAPITAL is targeting to improve unit economics.

Geopolitical Risks

Limited direct impact as operations are primarily domestic (India), but global liquidity affects the cost of ECB borrowings.

⚖️ Regulatory & Governance

Industry Regulations

Impacted by new accounting regulations (1/n) for insurance, which resulted in a reported H1 FY26 net loss of Rs. 102 Cr in the health segment. Compliance with RBI/NHB capital adequacy is maintained with a Tier I ratio of 15.6%.

Environmental Compliance

Not a primary risk for financial services, though ESG frameworks are integrated into corporate overview reports.

Taxation Policy Impact

Effective tax rate is standard corporate rate; HFC PBT of Rs. 194 Cr resulted in healthy post-tax returns (1.82% ROA).

Legal Contingencies

Not explicitly detailed with INR values; however, the company manages credit risk through ECL policies and write-offs for unsecured loans overdue by 180+ days.

⚠️ Risk Analysis

Key Uncertainties

Asset quality in unsecured segments is a key monitorable; Stage 3 assets in unsecured business were high at 5.4% before a strategic sale reduced them to 1.9%. Potential impact of 1.2%-1.3% credit costs on profitability.

Geographic Concentration Risk

Concentrated in India, with growth focused on 'emerging locations' to diversify away from tier-1 cities.

Third Party Dependencies

Significant dependency on digital sourcing partners and banca partners (12 tie-ups) for lead generation and disbursements.

Technology Obsolescence Risk

Mitigated by heavy investment in the 'ABCD' app and data science frameworks to ensure best-in-class digital customer onboarding and TAT reduction.

Credit & Counterparty Risk

73% of the NBFC book is secured, providing a safety net. PCR (Provision Coverage Ratio) stands at 44.2% for the NBFC and 57.6% for the HFC to cover potential defaults.