Aditya Birla Capital Results: NBFC reports 37% YoY profit after tax; expert says 'Buy' stock

Aditya Birla Capital Results: On account of better mutual fund and broking business, Aditya Birla Capital has given strong second-quarter numbers and half-yearly results. The Aditya Birla NBFC reported a robust 37 per cent YoY growth in its Profit After Tax (PAT) at Rs 256 crores, which stood at Rs 186 crores in the corresponding quarter in FY19. AB Capital has reported Rs 4,299 crores revenue in Q2FY20 while its revenue in Q2FY20 stood at Rs 3,978 — reflecting YoY growth of 8 per cent. AB Capital has reported Profit Before Tax (PBT) at Rs 471 crores in the September quarter which stood at Rs 385 crores in the corresponding September quarter.

Speaking on the reason for such robust growth in AB Capital's quarterly numbers, Prakash Pandey, MD & CEO at Plutus Advisors said, "AB Capital's quarterly and half-yearly numbers are on the expected lines as the markets were expecting strong numbers. In the last quarter, the mutual fund and broking businesses have performed well because the market has been hitting new highs. Since AB Capital has exposure there, it was bound to become one of the major beneficiaries of this robust performance. Apart from this, the company has got the benefit of lending business growth as the interest rates have been going down after the series of rate cuts by the RBI forcing other commercial banks to follow suit."

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On recommendations to the stock market investors in regard to AB Capital shares, Pandey said, "AB Capital shares are oscillating around Rs 85 levels and has strong support at Rs 75 per stock levels. I would recommend share market investors to buy the Aditya Birla shares at current levels for target of Rs 110 in three-months time." However, Pandey suggested investors maintain the stop loss at Rs 74.

While making its Q2 results public, AB Capital has also announced its H2FY20 numbers. AB Capital reports its PAT at Rs 526 crores in H2FY20, which stood at Rs 399 crores in H2FY19 — a YoY growth of 32 per cent. The company reported YoY half-yearly growth of 12 per cent in its revenue as its H2FY20 revenue rose at Rs 8,260 crores from Rs 7,402 crores in H2FY19. Its PBT too shot up at Rs 1,024 crores in H2FY20 from Rs 811 crores in H2FY19.