What Are the Key Growth Drivers for Aditya Birla Capital? Here’s What BoFA and Motilal Say

Synopsis: Brokerages Motilal Oswal and Bank of America highlight multiple growth drivers for Aditya Birla Capital, including expansion in lending, housing finance, and MSME credit. Improving asset quality, stronger credit demand, and operational efficiencies are expected to support earnings growth, with analysts forecasting healthy profit expansion and improving return on equity over the coming years.

Financial service providers across India are witnessing renewed growth momentum, driven by improving credit demand for their retail and housing as well as small-business loans. As economic activities gain momentum, coupled with improving government policies for the MSME sector, financial institutions focused on lending activities are witnessing improved growth prospects. 

Under this backdrop, financial broking houses have highlighted the growth potential of Aditya Birla Capital, citing improving fundamentals for their diversified businesses. Improvement in lending operations and increasing demand for housing loans, as well as improving efficiencies, are likely to positively impact their earnings as well as profitability.

Lending growth to drive earnings

Broking houses have pointed out improving fundamentals and growth visibility for Aditya Birla Capital, which is expected to be driven by the expansion of the company’s lending, housing finance, and asset management businesses. The diversified financial services businesses of the companies, say Motilal Oswal Financial Services and Bank of America, are likely to benefit from improving credit demand as well as operational efficiencies.

As per Motilal Oswal, the company is seeing improving fundamentals across businesses, especially in the NBFC segment of Aditya Birla Capital. The broking house stated, “We believe the company is witnessing improving fundamentals across businesses, especially within the NBFC segment of Aditya Birla Capital.” The company is likely to benefit from improving credit demand, as there would be better loan growth for the NBFC segment of the company.

The broker also pointed out that there is good growth potential in housing finance. With an increase in retail penetration and access to capital, the housing finance business is poised to step up its growth rate while continuing to display rising profitability. The good capital base of the group is also seen supporting growth in housing finance in the coming years.

Bank of America pointed out that an increase in growth in MSME lending could emerge as a key growth driver for the company in the coming years. Government policies supporting small businesses are seen supporting credit demand in this business segment. Increasing penetration in MSME lending and retail lending is seen supporting the loan growth prospects of the company.

The good growth prospects in all business segments of the diversified financial services business of the company have been pointed out by both Motilal Oswal and Bank of America. Motilal Oswal is expecting a growth in consolidated profit after taxes of around 26% CAGR between FY26 and FY28. With an increase in profitability, a rise in return on equity is also seen in the coming years.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post What Are the Key Growth Drivers for Aditya Birla Capital? Here’s What BoFA and Motilal Say appeared first on Trade Brains.