ICICI Securities has given Buy recommendation for Aditya Birla Capital with a target price of Rs. 169 in its research report issued on Apr 24, 2022

ICICI Securities research report on Aditya Birla Capital

Aditya Birla Capital’s (ABCL) Board, based on the NRC recommendations, has approved appointment of Ms. Vishakha Mulye (ED, ICICI Bank) as CEO. Mr. Ajay Srivinasan (current CEO) shall be taking up another role in Aditya Birla Group. Ms. Mulye will join on 1 st Jun’22 and operate as CEO (designate) with an overlap of one month with Mr. Ajay Srinivasan to ensure smooth transition. We believe further push and acceleration in the group’s structural strategy of rebalancing its NBFC portfolio (in favour of retail + SME) and its HFC portfolio (towards affordable segment + informal segment) will imbibe confidence. ABCL’s earnings trajectory reflects superior and quality operating performance led by its strategy of granularisation, retailisation and diversification within business segments.

Outlook

Further franchise investment, cross-sell/up-sell and leveraging digital and analytics will help the company boost its RoE profile. The stock is currently undervalued and our target price of Rs169 provides significant upside. Maintain BUY.

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