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Check Before You Invest : Aditya Birla Capital Ltd

BSE: 540691 NSE: ABCAPITAL ISIN: INE674K01013
  |   Sector:  BFSI   |   Industry:  Finance - NBFC

Snapshot

Q.1 Which industry/sub-sector does Aditya Birla Capital Ltd belong to?
Aditya Birla Capital Ltd belongs to the BFSI sector, operating specifically within the Finance - NBFC segment.
Q.2 Is Aditya Birla Capital Ltd a good quality company?
Aditya Birla Capital Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on the bank’s performance on Total Income growth, Pre-Provision Operating Profit, RoA, RoE, CAR, and Asset Quality, along with how these metrics compare with its long-term averages.

Q.3 Is Aditya Birla Capital Ltd undervalued or overvalued?
Aditya Birla Capital Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 22.11 16.82
Price to Book 2.85 2.15
Price to Sales 4.04 3.69
EV to EBITDA 10.37 11.03
Q.4 Is Aditya Birla Capital Ltd a good buy now?
Aditya Birla Capital Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Total Income growth, NPM, PPOP, RoA and RoE compared to its last 5-year median.

  • How efficiently has it grown and managed operations?

    By checking its Total Asset growth.

  • How strong is its Capital position and Asset Quality?

    By checking its Capital Adequacy Ratio (CAR), GNPA and NNPA.

A: What are the trends in income and profitability?

Q.1 Total Income growth of Aditya Birla Capital Ltd?
Aditya Birla Capital Ltd Operating Income growth is 12.12% for FY-2026, which is below its 5-year CAGR of 18.41%, indicating slower growth.

Q.2 Return on Assets of Aditya Birla Capital Ltd?
Aditya Birla Capital Ltd Return on Asset is 1.3%, which is in line with its 5-year historical median of 1.3%, indicating stable earnings on assets.
Current Level 5-year
Historic Median
NPM (%) 8.49 8.49
PPOP (%) 12.17 12.17
RoA (%) 1.3 1.3

Q.3 Return on Equity (ROE) of Aditya Birla Capital Ltd?
Aditya Birla Capital Ltd Return on Equity is 12.1% for FY-2026, which is in line with its 5-year historical median of 12.1%, indicating the business is making similar use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Aditya Birla Capital Ltd?
Aditya Birla Capital Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 12.17% for FY-2026, which is in line with its 5-year median(12.17%), indicating stable margins.

Q.5 Net Profit Margin of Aditya Birla Capital Ltd?
Aditya Birla Capital Ltd Net Profit Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 8.49% for FY-2026, which is in line with its 5-year median( 8.49%), indicating stable margins.

Q.6 Does its ROIC exceed its WACC?
Aditya Birla Capital Ltd return on invested capital (ROIC) is 6.2% for FY-2026, is lower than its estimated weighted average cost of capital (WACC) of 11.25%, indicating value erosion.

B: Does the bank grow efficiently and manage its operating costs?

Q.7 Total Asset growth of Aditya Birla Capital Ltd?
Aditya Birla Capital Ltd Total Asset growth is 20.25% for FY-2026, which is below its 5-year CAGR of 21.89%, indicating slower growth.

C: How strong is the bank’s capital position and asset quality?

Q.8 Capital Adequacy ratio of Aditya Birla Capital Ltd?
Aditya Birla Capital Ltd Capital Adequacy ratio (CAR) is 16.79% for FY-2026, which is above the regulatory requirement of 15%, indicating strong capital position.

Ownership & governance

D: Promoter shareholding and pledge status of Aditya Birla Capital Ltd?

Q.1 Promoter shareholding and pledge status of Aditya Birla Capital Ltd?
Promoters hold 68.82% of the Aditya Birla Capital Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Aditya Birla Capital Ltd performance compare with that of its Peers?

Q.1 AUM Growth of Aditya Birla Capital Ltd vs Industry Peers?
Aditya Birla Capital Ltd AUM CAGR is 21.89%, compared to the 5-year industry median CAGR of 14.75%, indicating faster growth and gaining its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of Aditya Birla Capital Ltd vs industry peers
Aditya Birla Capital Ltd profit metrics are below the industry median level of 9.77%, indicating weaker profitability compared to peers.
Profit Metrics
Current Level 5-year
Industry Median
NPM (%) 8.49 14.19
PPOP (%) 12.17 12.83
RoA (%) 1.3 2.3

Q.3 Operating efficiency of Aditya Birla Capital Ltd vs industry peers?
Aditya Birla Capital Ltd ROCE (9.5) is above the industry median of (); while the current ROE (12.1) are in line with than the 5-year average Industry ROE (12.1). This shows that the business is positioned in the middle quartile of the industry.
Operating Efficiency
Current Level 5-year
Industry Median
NPM (%) 8.49 14.19
PPOP (%) 12.17 12.83
RoA (%) 1.3 2.3
ROCE (%) 8.8 -
ROE (%) 12.1 12.1

Valuation & price assessment

Q.1 Stock return of Aditya Birla Capital Ltd over the last decade?
Over the last 5 years, the stock has delivered a CAGR of 30.51% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 30.5% 28.5% 12.8%
Q.2 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 22.11 16.82 19.44
Price to Book 2.85 2.15 1.15
Price to Sales 4.04 3.69 8.42
EV to EBITDA 10.37 11.03 11.24
Q.3 Valuation ratios of Aditya Birla Capital Ltd vs historical and industry averages?
The current Price-to-Book (P/B) ratio of 2.85 is higher than its historical median of 2.15, indicating that the stock is trading above its historical average valuation.

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