The Aditya Birla Capital share price has clocked sharp gains in recent months. The stock has delivered a whopping 72% return over the last 6 months. What could further add to the cheer is that Motilal Oswal has reiterated ‘Buy’ with a target price of Rs 340 a share. This implies nearly 20% upside for the stock from current levels.
Motilal Oswal outlined that Aditya Birla Capital continues to demonstrate healthy growth in its core businesses, NBFC, HFC, AMC, and life and health insurance, supported by improving profitability, operational leverage, and strong customer acquisition momentum. According to them, “its ‘One ABC’ strategy enhances cross-selling opportunities, increases wallet share, and improves cost efficiency. Its focus on digital transformation and expansion of distribution reach should also support long-term growth.
Motilal Oswal on Aditya Birla Capital: Well-positioned for growth
Aditya Birla Capital has amalgamated its wholly owned subsidiary, Aditya Birla Finance (ABFL), with itself, strengthening the operational flexibility. According to Motilal Oswal, “with its key building blocks firmly established and a vast market opportunity ahead, the company is well-positioned to achieve the next phase of growth.”
Looking forward, the company aims to “sustain the strong momentum built over the past three years by leveraging its diversified business model and strengthening its digital capabilities to simplify financial services and deliver an enhanced customer experience,” Motilal Oswal added.
Motilal Oswal on Aditya Birla Capital: Stress in MSME loans a worry?
With most lenders flagging stress in small-ticket unsecured MSME lending, Motilal Oswal pointed out that Aditya Birla Capital remains relatively well positioned. This, they pointed out, is due to its portfolio mix.
“Within the MSME portfolio, which forms 55% of the total loan book, 46% is secured, while just 1.3% constitutes small-ticket unsecured loans, an area where the company continues to remain cautious,” Motilal Oswal added.
Motilal Oswal on Aditya Birla Capital: Credit quality and business momentum
With credit quality stabilising and business momentum gaining traction, ABCL has started accelerating growth in its personal and consumer loans segment. Provided the macro environment remains supportive, Motilal Oswal anticipates that “this momentum is likely to be sustained in the coming quarters. Notably, the renewed focus on the P&C segment should also strengthen its overall profitability, given its structurally higher yields and margins.”
The housing finance subsidiary has posted robust growth over the past two years, underpinned by strategic investments that are now translating into tangible outcomes. According to Motilal Oswal, “Its strategy centres on maintaining a well-diversified portfolio, with a balanced emphasis on both prime and affordable housing, along with a significant presence in construction finance.”
Looking ahead, they expect the subsidiary to sustain its strong growth trajectory, supported by the capacity built in recent years and further reinforced by cross-selling opportunities across the ecosystem.