The Aditya Birla Capital share price has gained over 13% in the last 6 months, and leading domestic brokerage house, Motilal Oswal expects teh stock to rally further. It has rated the stock a ‘buy’ and predicted nearly 29% upside for Aditya Birla Capital’s (ABCL). The brokerage has set a target price of Rs 415.
Motilal Oswal remains positive, citing strong fundamentals across its various business segments. The brokerage says that the company is entering its ‘structurally stronger earnings phase’, driven by uniform growth across its lending, asset management, and insurance segments.
Despite the near-term weakness, the brokerage says it remains constructive on ABCL’s outlook. Here’s why.
Motilal Oswal on Aditya Birla Capital: Improving asset quality and margins
According to the brokerage report, the portfolio recalibration phase of the group’s NBFC business is nearly done, and growth is resuming across retail, MSME, and unsecured segments. The report added that the group has resumed calibrated lending in higher-yield segments while maintaining the requisite risk checks.
Also, the brokerage expects a rise in contributions from Personal & Consumer (P&C) loans, which would drive margin growth as the portfolio mix normalises and yields improve.
“We expect the NBFC loan book to double over the next three years, supported by an improving product mix, operating leverage, and steady RoA expansion,” analysts said in the report.
Motilal Oswal on Aditya Birla Capital: Digital transformation driving growth
The report added that the company has widened its market footprint, particularly among high retail users and the MSME segment, by prioritising digital growth. The group’s in-house-built digital platforms, the ABCD app and Udyog Plus app, have enhanced the firm’s operational productivity, the report added.
“This digital push, complemented by a robust omnichannel strategy, has fundamentally tightened D2C engagement and widened the firm’s market footprint,” Motilal Oswal said in its report.
Motilal Oswal on Aditya Birla Capital: Housing Finance key growth driver
Analysts at Motilal Oswal expect the group’s housing finance arm, Aditya Birla Housing Finance (ABHFL), to maintain strong growth, citing expansion of its loan book and diversified growth across other segments.
They add that ABHFL will drive its growth via a strong housing finance franchise across affordable and prime locations. Along with this, improving asset quality will accelerate the momentum, it added.
The brokerage said the growth will come as the company’s housing finance arm recently raised capital from Advent International.
Additionally, steady expansion in the company’s asset management company (AMC) and insurance profitability will accelerate the group’s earnings.
Motilal Oswal on Aditya Birla Capital: AMC key contributor to growth
The report added that Aditya Birla Sun Life AMC is a key contributor to ABCL’s earnings by improving fund performance, ensuring steady SIP inflows, and driving growth across its other products.
The group’s mutual fund franchise remains supported by consistent retail participation in SIP accounts.
The AUM’s alternative platforms have also grown, aided by the Employees’ State Insurance Corporation (ESIC) and PMS/AIF, which have built momentum among High-Net-Worth Individuals (HNIs) and family offices.
The AUM growth is also being driven by traction in passive segments like ETFs and precious metal offerings.
Positive momentum in insurance business driving growth
According to Motilal Oswal, Aditya Birla Capital’s life insurance business continues to scale, supported by a shift towards an improving product mix and distribution channels. This includes the group’s deeper participation with Axis Bank.
It added that the growth is value-accretive, boosted by strong sales in ULIPs and Credit Life, along with cross-selling. The report added that despite GST headwinds, the value of new business margins held up well.
The report noted that ABCL’s health insurance business continues to outpace industry growth, driven by expansion in the corporate segment and steady improvement in profitability.
Motilal Oswal on Aditya Birla Capital: Valuation and view
Analysts at Motilal Oswal hold a bullish view on Aditya Birla Capital, adding that the group continues to deliver healthy growth across its core businesses — NBFC, HFC, AMC, and life and health insurance.
“We expect consolidated PAT CAGR of 26% over FY26–FY28 and RoE expansion to 16% by FY28,” the report added.