Aditya Birla Capital Shares Soar to All-Time High, Market Cap Crosses Rs 75,000 Crore Amid Strong Q4 Performance and Strategic Demerger Plans

Aditya Birla Capital (ABCAP) has captured the financial spotlight, with its shares skyrocketing to an unprecedented all-time high of Rs 293.25 on the BSE. This significant milestone, achieved in early trade, saw the stock soar by an impressive 12 percent, catapulting the company's market capitalization past the formidable Rs 75,000 crore mark.

This remarkable ascent underscores a period of sustained robust performance, with ABCAP shares demonstrating a staggering 44 percent gain over the last month, a 60 percent rise in three months, and an even more impressive 85 percent surge over the past year.

The stellar rally is primarily fueled by the company's outstanding financial results for the fourth quarter of fiscal year 2024 (Q4 FY24) and an ambitious strategic restructuring initiative.

ABCAP reported a formidable 35 percent year-on-year (YoY) increase in profit, reaching Rs 804 crore, while its Net Interest Income (NII) surged by an impressive 44 percent YoY to Rs 9,573 crore. These figures not only exceeded market expectations but also highlighted the underlying strength and operational efficiency across its diverse business segments.

A deeper dive into the segmental performance reveals widespread growth and profitability.

The Non-Banking Financial Company (NBFC) arm, a cornerstone of ABCAP's operations, saw its Assets Under Management (AUM) jump by 40 percent YoY to Rs 1.15 lakh crore, with its Profit After Tax (PAT) increasing by 26 percent YoY to Rs 704 crore. Similarly, the Housing Finance business experienced a healthy 30 percent YoY growth in its loan book, which now stands at Rs 17,921 crore.

The Asset Management Company (AMC) also showcased strong performance, with AUM growing by 30 percent YoY to Rs 3.49 lakh crore and PAT rising by 21 percent YoY to Rs 206 crore.

The Life Insurance business contributed significantly to the overall positive outlook, reporting an 18 percent YoY increase in Gross Written Premium, totaling Rs 17,914 crore.

Furthermore, the Value of New Business (VNB) saw a substantial 25 percent YoY rise to Rs 1,411 crore, with the VNB margin expanding to a healthy 18.5 percent. These comprehensive growth figures across all key verticals paint a picture of a well-diversified and strategically managed financial powerhouse.

Brokerage houses have taken note of ABCAP's compelling trajectory.

Citi, for instance, had maintained a 'Buy' rating with a target price of Rs 250, a level that the stock has comfortably surpassed. Motilal Oswal similarly held a 'Buy' recommendation with a target of Rs 240, also exceeded by the current market performance. These endorsements reflect a broader consensus among analysts regarding the company's strong fundamentals and future growth potential.

Adding another layer of excitement and long-term value creation is ABCAP's proposed composite scheme of arrangement for the demerger of its NBFC business into a separate listed entity, to be named Aditya Birla Finance Ltd.

This strategic move, which has received board approval, aims to unlock significant value for shareholders by creating two distinct, focused listed companies. The demerger is expected to enhance operational flexibility, allow for better capital allocation tailored to each business's specific needs, and provide investors with clearer investment propositions.

While subject to regulatory and statutory approvals, this initiative is seen as a powerful catalyst for sustained growth and market re-rating.

With a robust financial performance, a clear growth strategy, and a transformative demerger plan on the horizon, Aditya Birla Capital is positioned for continued momentum.

The current surge in share price is a testament to investor confidence in its management, operational execution, and its vision to create long-term shareholder value in India's dynamic financial services sector.