Multi Bagger Pick …. Aditya Birla Capital

Stock Ideas ......Multi Bagger Pick …. Aditya Birla Capital

 

At the current price of Rs 183, I see an upside potential of 400% in 3-5 years for a target of Rs 650-800 in the long term. Even in short term it has a growth potential of giving 2 Bagger returns with a target of 300-350 in one year.


CMP 183                                           Listing Price 250

52 week Low 173                             52 week High 274

Market Capital 40000 Cr

Face value 10                Book Balue Rs 35                    Price/Book Value 5.35

SHARE CAPITAL 1232 CR            DEBT 492 CR

EPS 5                            ROCE% 10                                RONW %14




Information about Company and Background


Aditya Birla Capital brings all its financial solutions under one roof for a smarter money managing experience. Be it insurance, mutual funds or loans – all of your financial needs are covered under our four pillars of Protecting, Investing, Financing and Advising.

The company has presence across life insurance, asset management, private equity, corporate lending, structured finance, general insurance broking, equity, currency and commodity broking, pension fund management and health insurance.


Shares of Aditya Birla Capital Ltd (ABCL) were listed at Rs250 on the NSE. The stock hit the lower circuit of 5% to Rs237.50 a share, while the Nifty index closed at 9,974.40, up 0.57%

The listing is the last phase of a composite scheme of arrangement under which Aditya Birla Nuvo was merged with Grasim Industries and the financial services business was subsequently demerged into Aditya Birla Capital.

As per the scheme of amalgamation, Grasim issued three shares for every 10 shares of AB Nuvo held by investors. After this, investors in Grasim were given seven shares of Aditya Birla Capital for every one equity share they owned.

The swap ratio ensured that Grasim and Aditya Birla Nuvo investors own 25% of Aditya Birla Capital.


Heritage and History


Originally incorporated in October 2007 under the Companies Act 1956, Aditya Birla Financial Services Private Limited received the certificate of registration from the Reserve Bank of India in May 2009 to commence the business as non-deposit taking NBFC. 

In December 2014, the company was converted from a private limited company to a public limited company, and was renamed as ‘Aditya Birla Financial Services Limited’. 

During past one decade since its incorporation, the Company has come a long way to become one of the largest financial services players in India. Year 2017 marks a milestone, with the Company becoming a pure play listed holding company of all the financial services businesses of the Aditya Birla Group.


To mark this new phase in its journey, and in line with its new unified brand identity, the Company was rechristened as ‘Aditya Birla Capital Limited’ in June 2017.

The synopsis of its journey over past 10 years from 2007-2017 is as follows: 

• From 5 business lines to a well diversified portfolio of 12 business lines
• Aggregate AUM has grown 10 times to Rs. 2,463 billion
• Lending book (including Housing Finance) has grown 65 times to Rs. 388 billion
• Aggregate2 revenues have grown 6 times to Rs. 106 billion
• From Investment phase to aggregate2 earnings before tax of Rs. 11.5 billion

Parentage

Aditya Birla Capital is a part of the Aditya Birla Group, a USD 40 billion Indian multinational in the league of Fortune 500. Anchored by an extraordinary force of over 120,000 employees, belonging to 42 nationalities, the Aditya Birla Group operates in 36 countries across the globe. About 50 percent of its revenues flow from its overseas operations.

• Includes AUM of Life & Health Insurance, Private Equity & quarterly average AUM of Asset Management businesses
• Represents summation of 100% of the IGAAP financials of subsidiaries/JVs, before inter-company eliminations or minority interest

Aditya Birla Capital Limited (ABCL) is the holding company for all the financial service businesses of the Aditya Birla Group. With a strong presence across the life insurance, asset management, private equity, corporate lending, structured finance, general insurance broking, wealth management, equity, currency and commodity broking, online personal finance management, housing finance, pension fund management and health insurance business, ABCL is committed to serve the end-to-end financial services needs of its retail and corporate customers.

Formerly known as the Aditya Birla Financial Services Limited (ABFSL), ABCL ranks among the top 5 fund managers in India (excluding LIC) with an AUM of Rs. 2,463 billion as on March 31st, 2017 and has a lending book of Rs 388 billion. ABC reported aggregate revenue from businesses at Rs. 106 billion and profit before tax of Rs. 11.5 billion for fiscal 2016-17. Anchored by over 12,000 employees, ABC has a nationwide reach through over 1,300 points of presence and more than 142,000 agents / channel partners.

Aditya Birla Group

Aditya Birla Capital Limited is a part of the Aditya Birla Group, a USD 40 billion Indian multinational in the league of Fortune 500. Anchored by an extraordinary force of over 120,000 employees, belonging to 42 nationalities, the Aditya Birla Group operates in 36 countries across the globe. About 50 per cent of its revenues flow from its overseas operations.

Aditya Birla Capital Limited, formerly Aditya Birla Financial Services Limited, is an investment company. The Company, through its subsidiaries, provides financing, investment, protection and advisory services to its customers and clients. Its financing services include lending, financing and wealth management solutions, customized solutions in areas of personal and business loans, corporate finance, mortgages, capital market based lending, housing finance solutions such as home loans, home improvement and construction loans. Its investment services include asset management services, investment solutions, portfolio management services, investment advisory services and securities broking. Its protection services include protection solutions, children's future solutions, wealth with protection solutions, health and wellness solution, and health insurance. Its advisory services include insurance broking and risk advisory solutions to companies and individuals.

Businesses

Following business solutions come together to make Aditya Birla Capital

• Aditya Birla Sun Life Insurance Company Limited

ABSLI offers protection solutions, children’s future solutions, wealth with protection, health and wellness as well as retirement solutions.

• Aditya Birla Health Insurance Company Limited

ABHI focuses on encouraging people to adopt a healthier lifestyle by using smart technology and innovative product & service offerings.

• Aditya Birla Insurance Brokers Limited

ABIBL focuses on developing cost-effective and customized insurance packages while ensuring that the process of claim settlements is swift & painless.

• Aditya Birla Sun Life AMC Limited

ABSLAMC is the investment manager for the 4th largest fund house in India, Aditya Birla Sun Life Mutual Fund

• Aditya Birla Pension Management Limited

ABPML offers customized solutions to help you plan a comfortable retirement

• Aditya Birla Finance Limited

ABFL offers customized solutions in areas of Capital Markets, Infrastructure, Real Estate Finance, to name a few

• Aditya Birla Housing Finance Limited

ABHFL offers housing finance solutions such as home loans, home improvement & construction loans, balance transfer, top-up loans etc.

• Aditya Birla PE Advisors Private Limited

ABPEAPL offers investment management and advisory services to domestic and global investors

• Aditya Birla Money Limited

ABML offers solutions for Broking, Portfolio Management Services, Depository & Repository Solutions and Distributor of other Financial offerings.

• Aditya Birla MyUniverse Limited

Aditya Birla MyUniverse Limited is India’s number one personal finance platform housed under Aditya Birla Customer Services Limited.

Achievements

Among the Top 5 Private Diversified NBFCs in India

One of the largest Private Life Insurance Companies in India

One of the largest Asset Management Companies in India

One of the largest General Insurance Brokers in the country

Leading non-bank financial services player with a strong focus on quality of growth

Strength

They are renowned for risk management, people practices, sales management, investor education, product innovation & fund management capabilities

They are among the best 3 financial services players to work for [As per a study by Great Place to Work Institute, 2016]

They have continued to build a Broad based & Integrated financial services business

They continue to be one of the few players in the industry with a diversified portfolio that allows them to meet almost any customer need across the entire spectrum of his / her lifecycle

Their integrated play has helped them gain a competitive edge by allowing them to share best practices, derive cross-business synergies through cross-functional and cross-sectoral experience.

Distributors and partners gain tremendous value in businesses

Financial Achievements as of March 31, 2017

AUM - Rs. 2,463 billion has registered 34% y-o-y growth

Consolidated Lending Book has grown over 40% Y-o-Y to Rs 388 billion 

Aditya Birla Capital has entered the market space at the time when other banking and financial services present are seeing an upheaval due to NPA issues, Capitalisation requirements etc. By virtue of having a strong pedigree with deep pockets Aditya Birla Capital is in an unique position to capitalize on its strength and give multifold returns in coming 3-5 years time frame.

A buy call at current market price of Rs 183, with a target of Rs 650-Rs 800 in 3-5 years.

Happy Investing