Aditya Birla Capital (ABCL), a financial services provider, continued its robust growth in business operation in 4QFY19 as well. The company’s consolidated PBT increased by 59% yoy and PAT jumped by 52% yoy to `259cr for Q4FY19. Growth was supported by lending & AMC business, while health insurance continued to report loss; however management expects it to breakeven in next 2-3 years.

Outlook & Valuation: We believe broad based and integrated financial offerings will enable ABCL to benefit from financialisation of savings. We expect ABCL’s PAT to register CAGR of 42% over FY2019-21E, largely driven by lending segment and AMC. We recommend a Buy on the stock with a target price of `130.

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