Aditya Birla Capital Q2: NBFC profit tops Rs 1,000 crore
Aditya Birla Capital's NBFC arm earned Rs 1,008 crore in Q2 FY27 as assets grew 26.5% and stressed loans fell to 2.31%, company data shows.
Aditya Birla Capital reported on 30 October 2026 that its lending arm, the NBFC business, earned a profit after tax of Rs 1,008 crore in the July to September quarter, up 41% from a year earlier and its first quarter above Rs 1,000 crore. The group's consolidated profit after tax was Rs 1,288 crore, up 38%, on revenue of Rs 16,545 crore, according to coverage of the company's results presentation. The numbers are company-reported and were not independently audited by the outlets we read, but they show how a large non-bank lender is growing while keeping bad loans under control.
What the NBFC arm reported
NBFC stands for non-banking financial company: a lender that is regulated but does not take ordinary bank deposits. Aditya Birla Capital's NBFC arm is its largest lending business. For the quarter ended 30 September 2026, as reported by Multibagg and Investing.com from the company's presentation:
- assets under management (AUM) were Rs 1,76,557 crore, up 26.5% over a year and 5.4% over the previous quarter;
- disbursements were Rs 24,708 crore, against Rs 21,990 crore a year earlier and Rs 21,201 crore in the first quarter;
- net interest income including fees was Rs 2,488 crore, up 24.7%;
- profit before tax was Rs 1,352 crore, up 41.4% from Rs 956 crore;
- return on assets (profit as a share of average assets) was 2.45%, against 2.20% a year earlier; and
- net interest margin including fees was 6.00%, slightly down from 6.06%.
The housing finance arm earned Rs 260 crore, up 73%, on AUM of Rs 57,373 crore, up 50%. The combined lending portfolio was Rs 2,33,930 crore, up 32%.
One caution on the growth rates. A separate calculation using the company's own Q2 FY26 press release of Rs 855 crore for consolidated profit would imply growth nearer 50% than 38%, so the base used for comparison may differ. We have used the percentages as the sources report them and flag the difference.
Why asset quality is the number to read
Banks and NBFCs sort loans into three stages under accounting rules. Stage 1 loans are paying normally. Stage 2 loans have shown early stress, such as being overdue by more than 30 days. Stage 3 loans are in default, the closest equivalent of a non-performing asset (NPA). Added together, Stage 2 and Stage 3 show how much of the book is in trouble or heading there.
The company says that combined figure fell to 2.31% from 3.03% a year ago and 2.43% in the first quarter. Stage 2 stood at 1.03% and Stage 3 at 1.28%. The coverage ratio on Stage 3, meaning the share of those defaulted loans already provided for in the accounts, rose to 48.4% from 44.2%.
Credit provisioning, the money set aside for expected losses, was Rs 378 crore, flat from a year earlier even though the book grew by more than a quarter. As a share of the average lending book it fell to 0.92% from 1.16%. In plain terms, the lender is setting aside less per rupee lent because fewer loans are going bad, and that helped profit grow faster than assets.
The loan mix behind the numbers
The product mix explains both the profits and the risk. According to Multibagg's reading of the presentation, business loans make up 57% of NBFC AUM (Rs 1,01,119 crore). Secured business loans grew 26% to Rs 80,209 crore, while unsecured business loans grew faster, 53%, to Rs 20,910 crore. Personal and consumer loans grew 37% to Rs 24,955 crore, or 14% of AUM. Corporate and mid-market loans grew 15% to Rs 50,483 crore, or 29%.
About 71% of the book is secured, and 42% of AUM is covered by central government schemes, which can soften losses on some loans. For unsecured business loans, the stage 3 share was 1.0% before government guarantee cover and 0.6% after it, because 46% of that bad-loan book carries a guarantee.
Why does this matter? Unsecured lending to small businesses and individuals earns higher yields but has been the part of Indian credit where regulators and rating agencies have watched for stress. Faster growth there, with low defaults so far, is a bet that a benign credit cycle continues. The numbers show it holding for now. They do not show how those loans behave if the economy slows, and the company's quarter-on-quarter trend is the only evidence on offer.
Funding, margins and the other businesses
Lenders live on the gap between what they earn and what they pay for money. The reported margin of 6.00% is steady. Funding data shows the company raised Rs 10,077 crore of long-term borrowings in the quarter, up from Rs 9,280 crore in Q1. Term loans fell to 39% of funding from 42% while non-convertible debentures, bonds sold to investors, rose to 35% from 34%. A bigger share from bonds can lower costs when markets are calm but ties the lender more closely to investor sentiment.
The rest of the group tells a mixed story. Its asset management arm, Aditya Birla Sun Life AMC, earned Rs 221 crore, down 8%. Mutual fund average AUM was Rs 4,41,787 crore, up 4%. The headline group AUM growth of 116% and 140% for the asset manager is boosted by mandates and alternates and is not like for like, according to the Investing.com summary. In health insurance, the first half combined ratio was 106.5% against 103.1%, and profit before tax was Rs 46 crore against Rs 76 crore. A combined ratio above 100% means claims and costs exceeded premiums.
What it means for borrowers and lenders
For borrowers, a lender with improving asset quality and steady margins has less pressure to tighten credit or raise rates. Secured business loans, which dominate this book, are the part most likely to stay available. For small businesses seeking unsecured loans, the faster growth shows lenders are willing to lend, supported in part by government guarantee schemes.
For other NBFCs, the benchmark is useful: a credit cost of 92 basis points (a basis point is one hundredth of a percentage point) and combined Stage 2 and 3 of 2.31% set a reference for large diversified lenders. Smaller lenders with a higher share of unsecured loans typically report weaker figures.
Use the simulator to see how sensitive profit is to credit cost. The default book size is implied by the reported Rs 378 crore provision and 0.92% ratio, so treat it as an approximation.
What to watch next
The Q3 FY27 results, due around late January 2027 on the company's usual calendar, will show whether disbursement growth of Rs 24,708 crore a quarter keeps turning into AUM growth without stress rising, and whether margins hold near 6%. The unsecured business loan book, up 53%, is the segment to watch.
Key takeaways
- Aditya Birla Capital's NBFC arm earned Rs 1,008 crore in Q2 FY27, up 41%, as AUM grew 26.5% to Rs 1,76,557 crore.
- Stage 2 and Stage 3 loans fell to 2.31% of the book from 3.03% a year earlier, and credit cost eased to 0.92% from 1.16%.
- About 71% of the book is secured, but unsecured business loans grew 53% and are the segment to watch.
- Group profit was Rs 1,288 crore, but asset management profit fell 8% and health insurance had a combined ratio of 106.5%.
- All figures are company-reported, and the year-ago base for group profit growth differs between sources.
Sources
- [Investing.com: Aditya Birla Capital Q2 FY27 slides, 38% profit growth, AI transformation](https://za.investing.com/news/stock-market-news/aditya-birla-capital-q2-fy27-slides-38-profit-growth-ai-transformation-93CH-4541038)
- [Multibagg: Aditya Birla Capital NBFC AUM rose 26% as Stage 2+3 fell](https://www.multibagg.ai/market-pulse/articles/aditya-birla-capital-nbfc-growth-ppt-cmvuuacpw002x2klzlxzxpkk6)
Tags: NBFC Quarterly results Credit costs Asset quality Aditya Birla Capital