Aditya Birla Capital FY26: Growth across lending and insurance, with asset quality improving

Aditya Birla Capital ended FY26 with broad-based growth across its lending, insurance, and asset management businesses. Consolidated segment revenue was reported at 53,871 crore, up 14% year on year. Profit after tax excluding one-off items was reported at 3,797 crore, up 21% year on year. In Q4 FY26, management stated that consolidated profit after tax excluding one-offs grew 30% year on year to 1,124 crore.

The year was also marked by scale in the lending book and stronger credit metrics. The overall lending portfolio (NBFC plus housing finance) stood at 2,07,368 crore as of March 31, 2026, up 32% year on year and up 9% sequentially. Total AUM across AMC, life insurance, and health insurance was 5,91,343 crore, up 16% year on year.

Lending: scale with better credit trends

The NBFC business closed FY26 with AUM of 1,59,916 crore, up 27% year on year and 8% quarter on quarter. Retail, SME and HNI loans were 1,08,427 crore, representing 68% of AUM. Profitability remained steady, with FY26 profit after tax in the NBFC business at 3,001 crore and RoA at 2.25%.

Credit quality improved through the year. GS2 and GS3 for the NBFC business was 2.42% at March 31, 2026, down 136 bps year on year and down 37 to 38 bps sequentially. The presentation also showed Stage 3 PCR at 47.8% for March 2026.

Management commentary suggested that margin expansion is expected primarily through product mix. The NBFC CEO indicated that if unsecured business and personal and consumer mix improves by about 200 bps over the next 2 to 3 quarters, margins could expand by about 25 to 30 bps. Management also guided credit costs at 1.1% to 1.2%, versus 1.04% in Q4 FY26 and 1.18% for FY26.

Housing finance: growth plus capital infusion

Aditya Birla Housing Finance reported AUM of 47,452 crore, up 53% year on year, supported by FY26 disbursements of 25,332 crore, up 44% year on year. Portfolio quality remained strong with Stage 2 and 3 at 0.76% in March 2026 and Stage 3 PCR at 59.0%.

Profitability scaled sharply. FY26 profit before tax was 832 crore, up 98% year on year, while profit after tax was 647 crore. RoA stood at 1.88% for FY26 and 2.07% for Q4 FY26.

A key corporate development was the equity raise in the housing finance subsidiary. Management stated that in April 2026 it concluded the 2,750 crore equity fund raise from Advent International after approvals. The investor deck notes that on April 17, 2026, housing finance allotted equity shares to Advent, resulting in ABCL holding about 86% stake.

The housing finance CEO laid out explicit operational guidance. The company plans to open 100+ branches in FY27 and targets reaching 1 lakh crore AUM in the next 24 to 30 months. It also guided to RoA of 2.1% to 2.2% in FY27 with NII and credit cost expected to be range-bound.

AMC and insurance: steady scale, improving insurance economics

In asset management, quarterly average mutual fund AUM was 4,35,866 crore in Q4 FY26, up 14% year on year, with equity QAAUM of 1,97,374 crore, up 17% year on year. FY26 operating profit was 1,051 crore, up 11% year on year, while FY26 PAT was 975 crore, up 5% year on year. The quarter, however, saw lower profitability, with Q4 FY26 PAT at 187 crore versus 228 crore in Q4 FY25.

Life insurance posted strong improvement in value metrics. Individual first year premium was 4,725 crore in FY26, up 15% year on year, while total premium was 24,779 crore, up 20% year on year. Net VNB margin was reported at 20.6%, up about 260 bps year on year, with absolute VNB at 1,055 crore.

Health insurance delivered growth with a gradual improvement in profitability metrics. Gross written premium (with 1 over n) was 6,855 crore in FY26, up 39% year on year, with market share among standalone health insurers at 13.7% versus 12.6% last year. The combined ratio improved to 103% from 105%. Management also quantified near-term impacts from GST and labor code changes on profitability.

Strategy and disclosures: digital, AI, and funding headroom

The investor presentation emphasized omnichannel distribution and AI-led process improvement. The group highlighted 1,740 branches across businesses and 1,020 co-located One ABC branches across 260 locations, supported by more than 2 lakh channel partners. ABCD app was reported at 11 million customers, 26+ product categories, and 4.7 million VPAs created as of March 31, 2026.

The company also discussed AI initiatives across underwriting, sales, voice bots, customer service, audit, and software development, including quantified benefits such as underwriting productivity improvement of 20 to 30% and 90% first call resolution in customer service. In the concall, the NBFC CEO stated that by end FY26 about 65% of contact-centre calls and about 71% of service emails were straight-through processed.

From a corporate announcement perspective, ABCL also disclosed board approval to raise the overall borrowing limit to 2,00,000 crore from 1,65,000 crore, subject to shareholder approval, alongside sub-limits for NCD categories and commercial paper.

Takeaways

FY26 for Aditya Birla Capital combined strong growth in lending and insurance with improving asset quality and increasing use of digital and AI as operating levers. The next year will likely be tracked through a few clear checkpoints: whether NBFC margins expand with mix shift without a credit cost spike, whether housing finance executes branch-led expansion while holding portfolio quality, and whether insurance businesses continue to improve underlying economics while navigating accounting and regulatory changes.