Aditya Birla Capital Q3 results: Net profit down 4% at Rs 708 crore

Margins under pressure for NBFC unit

Aditya Birla Capital Ltd (ABCL) reported a 4 per cent year-on-year (Y-o-Y) decline in consolidated net profit to Rs 708 crore in the third quarter ended December 2024 (Q3FY25), compared to Rs 736 crore a year ago.

 

The consolidated revenue for the reporting quarter rose 10 per cent Y-o-Y to Rs 10,949 crore in Q3FY25.

 

ABCL, a holding entity for the Aditya Birla Group's financial services businesses, including lending, mutual funds, and insurance, saw its stock close 2.58 per cent lower at Rs 172.1 per share on the BSE.

 

The total lending portfolio, covering segments like MSME and housing finance, grew 27 per cent Y-o-Y to Rs 1.46 trillion at the end of December 2024 (Q3FY25), according to an analyst presentation.

 

Its non-banking finance company (NBFC) unit, Aditya Birla Finance Ltd, saw its net interest income (NII) increase 5 per cent Y-o-Y to Rs 1,734 crore. However, its net interest margin (NIM), including fee income, declined to 6 per cent in Q3FY25 from 6.88 per cent in Q3FY24.

 

In the post-results analyst call, Rakesh Singh, managing director, Aditya Birla Finance, said margins would stabilise around this level before improving.

 

The NBFC’s disbursements in Q3FY25 shrank 8 per cent to Rs 15,233 crore, from Rs 16,550 crore in Q3FY24. However, the loan book expanded 21 per cent Y-o-Y to Rs 1.19 trillion.

 

“The focus is on growing the MSME loan book, while growth in the personal and consumer loan segment will continue to be calibrated,” Singh said.

 

The asset quality improved, with gross non-performing assets (NPAs) falling to 2.3 per cent in December 2024, compared to 2.6 per cent a year earlier.

 

The capital adequacy ratio stood at 16.77 per cent, with Tier-I capital at 14.43 per cent at the end of December 2024.

 

The housing finance unit posted 39 per cent Y-o-Y growth in net interest income (NII) at Rs 290 crore in Q3FY25.

 

Disbursements grew 136 per cent to Rs 4,750 crore in Q3FY25, while the loan book expanded 62 per cent Y-o-Y to Rs 26,714 crore at the end of December 2024.

 

The asset quality of the home loan portfolio improved, with gross NPAs falling to 0.99 per cent in December 2024, compared to 2.18 per cent a year earlier.

 

The capital adequacy ratio stood at 16.92 per cent, with Tier-I capital at 14.98 per cent at the end of December 2024.

 

The total assets under management (AUM) of the company, including mutual funds, life insurance, and health insurance, increased 23 per cent Y-o-Y to Rs 5.03 trillion at the end of December 2024.