4QFY2018 Result Update | Finance
May 19, 2018
Aditya Birla Capital
BUY
CMP
`148
Performance Highlights
Target Price
`218
Particulars (` cr)
4QFY18
3QFY18
% chg (qoq) 4QFY17
% chg (yoy)
Investment Period
12 Months
PBT
398
409
(2.7)
240
65.8
PAT
208
217
(4.1)
109
90.8
Source: Company, Angel Research
Stock Info
Aditya Birla Capital (ABCL), a financial service provider, continued its robust growth
Sector
Finance
Market Cap (` cr)
32,598
in business operation in 4QFY18 as well. The company’s consolidated revenue
Beta
0.9
increased by 25%yoy and PAT jumped by 91%yoy to `208cr in said quarter.
52 Week High / Low
255/144
Consistent growth throughout the year took the company’s net profit for the FY18 to
Avg. Daily Volume
3,44,102
`824cr, up by 44%. Its business development was supported by an increase in
Face Value (`)
10
lending business by all the segments of the company. The consolidated AUM rose by
BSE Sensex
35,249
Nifty
10,712
24% to `3,05,295cr and simultaneously, loan book expanded by 32% to `51,378cr
Reuters Code
ADTB.NS
for the FY18.
Bloomberg Code
ABCAP.IN
Coherent strategies for each segment propels overall growth
The company’s operations are divided in 8 segments. Of these, major income
generation comes NBFC, Asset Management, Life insurance and housing finance.
Shareholding Pattern (%)
NBFC: This segment is comprised of retail, SME and UHNI lending, constituting 47%
Promoters
72.8
of the loan mix. Loan book increased by 25% to `34,703cr in FY18. GNPA and
MF / Banks / Indian Fls
7.0
NPA were maintained at 0.9% and 0.6%, respectively. NIM was healthy at 4.4%.
Asset Management: Revenues from this segment increased by 10%yoy in 4QFY18
FII / NRIs / OCBs
7.6
and 25% in FY18. Share of equity AUM rose by 35% and revenues grew by 73%.
Indian Public / Others
10.2
This was primarily due to doubling in SIP contribution which increased to `956cr
from `503cr in the previous year.
Insurance : In 4QFY18 ABCL’s first year premium (FYP) increased by 20%yoy. It also
Abs. (%)
3m 1yr
3yr
managed to report positive VNB margin of 4.3% compared to (5.5%) in the year
Sensex
3.0
14.0
26.0
ago. Further, it has also widened its presence through branch channel of HDFC.
Housing finance: Started just 7 quarters back, this segment generated profits before
ABCL
(9.0)
-
-
tax for the first time in 4QFY18. EBIT was `24cr over a loss of `15cr in the year-go,
favoured by a sharp decrease in cost/income ratio to 71% from 86% in 4QFY17.
Price chart
The HFC loan book almost doubled to `8,137cr in FY18, maintaining the asset
300
quality at GNPA of 0.5% and NPA of 0.4%. The segment’s NIM was 3% at the end
250
of FY18.
200
150
Outlook & Valuation: We believe broad based and integrated financial offerings
100
would enable ABCL to take benefit of financialisation of savings. We expect ABCL’s
50
0
PAT to grow at CAGR of 47% over FY2018-20E, largely driven by Lending segment
and AMC. We recommend a Buy rating on the stock, with a target price of `218.
Key Financials
Source: Company, Angel Research
Y/E March (` cr)
FY16
FY17
FY18
FY19E
FY20E
PBT
869
1,065
1,554
2,309
3,319
% chg
23
46
49
44
PAT
380
529
847
1,266
1,822
% chg
39
60
49
44
EPS
2
2
4
6
8
Jaikishan Parmar
ROE
9
8
10
13
16
022 - 39357600 Ext: 6810
P/B
7.3
4.9
3.8
3.3
2.8
P/E
85
61
38
26
18
Source: Company, Angel Research; Note: CMP as of May18, 2018
Please refer to important disclosures at the end of this report
1
Aditya Birla Capital Ltd | Q4FY2018 Result Update
Outlook & Valuation:
We believe broad based and integrated financial offering enable ABCL to take
benefit of finacialisation of savings. Core lending business (after adjusting
value of AMC, Life Insurance, ABML & Other) is available at 1.7x of FY20E BV.
We expect ABCL PAT to grow at CAGR of 47% over FY18-FY20E, largely
driven by Lending segment and AMC. We recommend a buy rating on the
stock and an SOTP-based target price of `218.
Exhibit 1: SOTP valuation summary
Valuation
Particulars
Stake
Value/share (`)
Methodology
NBFC
100%
3.2x FY20E PBV
127
HFC
100%
3.5x FY20E PBV
15
AMC
51%
7.3% of AUM
45
Life Insurance
51%
3x FY18 EV
30
ABML
74%
CMP
1
Fair value per share
218
Consolidated Profit & Loss
Y/E March (` cr)
FY16
FY17
FY18E
FY19E
FY20E
Segment PBT
NBFC
626
832
1,108
1,481
1,948
Life Insurance
-
-
166
199
239
Asset Management
314
337
493
729
1,012
HFC
(30)
(15)
31
70
217
Other Financial Services
9
(45)
(101)
(86)
(73)
Total PBT
928
1,064
1,554
2,309
3,319
- YoY Growth (%)
15
46
49
44
Consolidated Adj
(50)
(44)
-
-
-
Consolidated PBT
869
1,065
1,554
2,309
3,319
Taxes
345
375
528
785
1,128
Tax Rate (%)
40
35
34
34
34
Consolidated PAT
524
690
1,026
1,524
2,190
Minority Interest
144
161
179
258
369
Consolidated PAT Post MI
380
529
847
1,266
1,822
- YoY Growth (%)
39
60
49
44
May 19, 2018
2
Aditya Birla Capital Ltd | Q4FY2018 Result Update
Research Team Tel: 022 - 39357800
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited,
Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL
and Portfolio Manager and Investment Adviser with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking
Private Limited is a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide
registration number INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory
authority for accessing /dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or
co-managed public offering of securities of the company covered by Analyst during the past twelve months.
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decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
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contrary view, if any
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Disclosure of Interest Statement
Aditya Birla Capital Ltd
1. Analyst ownership of the stock
No
2. Angel and its Group companies ownership of the stock
No
3. Angel and its Group companies' Directors ownership of the stock
No
4. Broking relationship with company covered
No
Ratings (Based on expected returns
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
over 12 months investment period):
Reduce (-5% to -15%)
Sell (< -15)
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors
May 19, 2018
3
