Broker’s call: AB Capital (Buy)

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Target: ₹280

CMP: ₹223.20

Aditya Birla Capital Ltd (ABCL) is a diversified financial services group that operates in various businesses including non-banking finance, housing finance, life insurance, standalone health insurance, asset management, stock and securities broking, wealth services and asset reconstruction.

Post management change in July’22 with Vishakha Mulye at the helm as MD & CEO, ABCL has reimagined its business offering and initiated a tech transformation journey to leverage its about 35 million customer base and around 200k channel partners at the group level. For the lending business, the company has guided a roadmap for doubling FY23 AUM in Aditya Birla Finance and Aditya Birla Housing by FY26E.

In FY24, Aditya Birla Finance AUM reached ₹1,05,639 corer and Aditya Birla Housing Finance AUM is at ₹18,420 crore. So far, in Q1-FY25, Aditya Birla Finance has registered an AUM growth of 25 per cent y-o-y at ₹1,07,306 crore and housing finance has registered an AUM growth of 33 per cent y-o-y at ₹20,399 crore.

We value the stock on a SOTP basis with Aditya Birla Finance at 2x FY26E BV, Aditya Birla Housing Finance at 1.8x FY26E BV, Aditya Birla AMC at 20x FY26E EPS, Aditya Birla Life insurance at 1.8x FY24E EV, Aditya Birla Health Insurance at recent deal value and other at 1x M.cap