ABCL Q1 Preview: Can the Rally Hold After Results?

With Aditya Birla Capital (ABCL) set to announce its Q1 FY26 results on August 4, 2025, investors are looking for the financial services conglomerate to sustain the strong all-around growth it delivered last year. FY25 was a robust year across ABCL’s lending, insurance, and asset management businesses, and the April–June 2025 quarter will be the first to reflect the company’s streamlined structure after the merger of its NBFC arm into the parent (effective April 1, 2024). In this preview, we outline what to expect from ABCL’s results – from last year’s performance recap to key metrics to watch – with a professional, investor-focused lens. The year that was (FY25 Recap) Consolidated performance: FY25 marked a year of healthy growth for ABCL. Consolidated revenue rose 20 per cent year-on-year to Rs 47,369 crore, driving a 19 per cent increase in operating profit to Rs 5,475 crore. Net profit grew 8 per cent YoY to Rs 3,142 crore in FY25. The overall lending book (NBFC and housing) expanded 27 per cent YoY to Rs 1.57 lakh crore as of March 2025, reflecting strong credit demand. Meanwhile, total assets under management (across the asset management, life insurance, and health insurance verticals) grew 17 per cent YoY to Rs 5.11 lakh crore, and combined life and health insurance premiums rose 22 per cent to Rs 25,579 crore. These figures underscore broad-based momentum across ABCL’s portfolio. Lending (NBFC) business: Aditya Birla Finance, the NBFC arm, delivered steady growth. The NBFC’s loan book grew 20 per cent in FY25 to Rs 1.26 lakh crore. Disbursements picked up pace, rising 28 per cent sequentially in Q4 FY25, and loans to retail, SME and HNI borrowers now form nearly two-thirds of the portfolio. Profit before tax for the NBFC segment climbed 12 per cent YoY to Rs 3,360 crore in FY25, supported by stable net interest margins and improved operating leverage. Asset quality also improved – gross Stage 2 and 3 loans were cut to 3.78 per cent, down 71 basis points from a year ago – indicating prudent risk management even as the book expanded. The NBFC achieved a healthy return on assets of 2.27 per cent for FY25, reflecting a solid balance of growth and credit quality. Housing finance: The housing finance subsidiary (Aditya Birla Housing Finance) was a standout performer in FY25. Its assets under management surged 69 per cent YoY to Rs 31,053 crore, as the company aggressively grew its affordable housing and retail mortgage portfolio. Disbursements more than doubled, rising 109 per cent in FY25 to Rs 17,468 crore, indicating strong demand for home loans. This rapid growth translated into higher earnings – housing finance profit before tax was Rs 419 crore for FY25, up 11 per cent YoY. Notably, asset quality in housing finance has improved significantly, with the gross Stage 3 (NPLs) ratio down to just 0.66 per cent (a 116 bps improvement year-over-year). Returns are still moderate (FY25 ROE  around 11 per cent), but the sharp growth and low delinquencies point to a business scaling up responsibly. Asset management: The asset management arm, Aditya Birla Sun Life AMC, contributed stable growth and profits. Average mutual fund AUM grew 15 per cent YoY to Rs 3.82 lakh crore in Q4 FY25, with equity-oriented assets comprising around 44 per cent of the mix. For the full year, the AMC’s operating profit jumped 31 per cent to Rs 944 crore, benefiting from higher equity markets and cost control. Retail investor participation also increased – individual investor AUM was up 6 per cent, and monthly SIP inflows rose to Rs 1,316 crore in March 2025 (5 per cent higher YoY). With equity markets rebounding, ABCL’s mutual fund business saw a healthy uptick in fee income. The AMC remains one of the top fund houses in India and a key contributor to ABCL’s consolidated earnings. Life insurance: Aditya Birla Sun Life Insurance (ABSLI) delivered strong new business growth i