Aditya Birla Capital Ltd Management Discussions

OVERVIEW

Aditya Birla Capital Limited ("ABCL") is a listed systemically important nondeposit taking Non-Banking Financial Company (NBFC) and the holding company of the financial services businesses. Through its subsidiaries/ JVs, ABCL provides a comprehensive suite of financial solutions across loans, investments, insurance, and payments to serve the diverse needs of customers across their lifecycles. Powered by over

60,000 employees, the businesses of ABCL have a nationwide reach with over 1,623 branches and more than 200,000 agents/channel partners along with several bank partners. As of 31st March 2025, ABCL manages aggregate assets under management of over Rs. 5.11 Lakh Crore with a consolidated lending book of over Rs. 1.57 lakh Crore through its subsidiaries/JVs.

Backed by a diversified business model, ABCL continues to maintain its track record of consistent growth in profit delivery. Below are key highlights of ABCLs financial performance for FY25.

Consolidated Profit and Loss

(J Crore)	FY24	FY25
Revenue	33,454	40,360
Profit Before Tax before share of profit/(loss) of JVs	3,725	4,196
Add: Share of Profit/(loss) of associate and JVs	304	417
Profit before tax	4,029	4,613
Less: Provision for taxation	1 ,073	1 ,422
Profit after tax before MI (Continued Operation)	2,955	3,191
Add: Profit after tax before MI (Discontinued Operation)	51	28
Profit after tax	3,006	3,219
Less: Minority Interest	(104)	(78)
Net Profit (after Minority Interest)	2,902	3,142
Add: Gain on Sale of stake in Subs/associate (net of tax)	433	191
Reported Profit After Tax	3,335	3,332

AMALGAMATION OF ADITYA BIRLA FINANCE LIMITED (ABFL) WITH ADITYA BIRLA CAPITAL LIMITED (ABCL)

The respective Board of Directors of ABCL and ABFL approved the proposed scheme of amalgamation on 11th March 2024 and the process has been completed after receiving requisite approvals from shareholders, creditors and regulatory / statutory authorities including the Stock Exchanges, Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI) and the National Company Law Tribunal (NCLT). After completion of the amalgamation, the assets, liabilities and the entire business of ABFL has been transferred and vests with ABCL. The equity investment of ABCL in ABFL stands cancelled. There was no issuance of new shares. Hence, there is no change in the shareholding of Aditya Birla Capital. Aditya Birla Capital is the surviving entity and has been converted from a holding company to an operating NBFC with listed equity shares. The amalgamation was tax-neutral.

ABCL now has two business segments, first- the NBFC lending business and second-the investment business through which it will continue to hold investments in all its subsidiaries and associate businesses. The amalgamation increases ABCLs strength and agility as a unified larger operating entity. With a simplified corporate structure, ABCL now has better access to capital to drive operational synergies, long-term growth and enhanced value creation for all stakeholders.

SALE OF ADITYA BIRLA INSURANCE BROKERS LIMITED

During FY25, ABCL concluded the sale of its insurance broking subsidiary, Aditya Birla Insurance Brokers Limited (ABIBL) to Edme Services Private Limited (part of the Samara Group) post the receipt of requisite approvals. The sale resulted in a gain of Rs. 225 Crore (net of tax) in FY25.

NBFC Business

The NBFC business was established in 1991 and has been registered with the RBI since 1999 to operate as a non-deposit-taking NBFC under Section 45-IA of the RBI Act, 1934. We operate through four key verticals: personal and consumer loans, unsecured business loans, secured business loans, and corporate/mid-market loans. The business continues to demonstrate strong growth, supported by calibrated strategies and a diversified sourcing model, with an increased focus on direct origination.

INDUSTRY OVERVIEW

The NBFC sector in India has undergone a remarkable transformation since its inception, driven by significant growth in segments such as mortgages, consumer finance and MSME finance. This growth is driven by various factors such as a growing middle class, enhanced financial inclusion, digitisation and democratisation of data and positive policy interventions. NBFCs have managed to cater to the diverse needs of borrowers efficiently, considering their vast geographical footprint, understanding of various financial requirements of the people and fast turnaround times.

The sector has leveraged digitisation to offer alternative financing options, especially to MSMEs, which face challenges in obtaining loans from banks. In FY24, MSME-related products constituted around 45% of Indias total exports, underscoring their role in establishing the country as a global manufacturing hub. New budgetary measures aim to provide better access to resources to MSMEs. The limits for investment and turnover classification have been increased by 2.5 times and 2 times, respectively. ABCL continues to focus on providing credit support to these MSMEs and being a part of their growth story.

In January 2025, the FIDC submitted a proposal to the Government of India to create a refinance or liquidity facility to boost lending for priority sectors like agriculture and small businesses. The proposal includes raising borrowing limits for priority sector financing and establishing a structured mechanism to ensure smoother and more organised access to funds.

On 25th February 2025, the RBI lowered the risk weights on bank loans to NBFCs and MFIs to stimulate credit flow and lending, reversing an earlier increase in risk weights. This move enhances banks Tier 1 capital ratio and holds the potential to reduce funding costs for NBFCs.

BUSINESS OVERVIEW

ABCLs NBFC AUM stood at Rs. 1,26,351 Crore as on 31st March 2025, representing a growth of 20% over 31st March 2024. Our disbursements grew by 5% year-on-year to Rs. 67,520 Crore for FY25. Over the last 3 years, our AUM and profits have more than doubled which translates to a CAGR of more than 30%. Loans to retail, SME and HNI customers comprise ~64% of the portfolio. About 74% of the portfolio is secured. Prudent risk management practices form the bedrock of our approach, which enables us to pursue growth while protecting capital. Taking into consideration the early warning signals and challenges in the operating and macro environment such as over leverage, we tightened our underwriting norms, calibrated our sourcing from certain digital partners and reduced our exposure to smaller ticket size personal, consumer and unsecured MSME loans. This approach has held us in good stead. Our credit quality remains robust with gross stage 2 and 3 loans declining by 71 basis points year-on- year to 3.78% as of 31st March 2025. Our credit costs improved by 19 basis points year-on-year to 1.31% in FY25. Our gross stage 3 PCR was 45%. We now believe that the operating environment has stabilised. Going forward, we will focus on growing the personal loans and unsecured SME loans, by acquiring customers through our branches, our digital platforms- Udyog Plus and ABCD and certain marquee digital partners.

Our key customer segments are Secured Business, Unsecured Business, Personal and Consumer and Corporate/Mid-Market. Below is a brief description of each of our customer segment:

Secured business

Our secured business loan portfolio increased by 28% year-on-year to Rs. 57,992 Crore as on 31st March 2025, and disbursements increased by 12% year-on-year to Rs. 26,631 Crore in FY25. This segment contributes 46% to total

AUM and its average ticket size was Rs. 1.4 Crore as of 31st March 2025. We offer a range of financial solutions including loan against property (LAP), Lease Rental Discounting (LRD), working capital loans, loan against securities (LAS), Micro-LAP, and other secured term loans, allowing our customers to access funds swiftly.

Our LRD product helps clients finance business growth and asset development by unlocking the value of their property. We acquire customers in this segment through our nationwide network of branches and direct sourcing agents (DSAs). About 58% of loans were sourced directly and 42% of loans were sourced through DSAs.

Unsecured business

Our unsecured business loan portfolio increased by 10% year-on-year to Rs. 12,066 Crore as on 31st March 2025.

In FY25, disbursements in this segment were Rs. 4,660 Crore. The segment contributed 10% to the overall portfolio and its average ticket size was Rs. 10.4 lakh as of 31st March 2025. This segment comprises overdraft, working capital, term loans to small businesses and supply chain financing. Keeping in mind the largely evolving digital landscape and the diverse needs of our customers, we have created various digital offerings in this segment. Our comprehensive B2B platform for MSMEs, Udyog Plus, offers paperless digital journeys for small ticket loans along with various value-added services. We have integrated Udyog Plus with several government and private ecommerce websites via OCEN to provide credit facilities to sellers on these platforms. We have also integrated Udyog Plus with ABG ecosystem to provide channel financing to dealers. About 21% of the disbursements in this segment were through Udyog Plus.

03 Personal and consumer

The personal and consumer loan portfolio was Rs. 15,532 Crore, as of 31st March 2025 and disbursements were Rs. 11,695 Crore in FY25. The average ticket size of this segment was Rs. 1.9 Lakh for personal loans. This segments contribution to the overall portfolio was 12% as on 31st March 2025. We serve salaried professionals and individuals within the growing income segment. We are focusing on strengthening our internal sourcing channels and acquiring customers through our branches, ABCD App and ABG ecosystem. Our ABCD app contributed about 5% of the personal loans disbursements in March, 2025. Further, we are also looking at collaborating with a few marquee digital platforms. In these arrangements, the sourcing will be done by the partners but the responsibility for underwriting, fulfillment and collections lies with us. We have also strengthened our retail and SME products, underwriting, sales and distribution teams. The personal and consumer loan portfolio has stabilised as of 31st March 2025 and we believe that these actions will help us to grow our personal loans segment and gradually increase their mix going forward.

04 Corporate and mid-market

The corporate and mid-market segment grew by 27% year-on-year to Rs. 40,760 Crore as of 31st March 2025, and disbursements grew by 44% year-on-year to Rs. 24,535 Crore in FY25. This portfolio constitutes 32% of the overall AUM and the average ticket size was Rs. 70.8 Crore as of 31st March 2025. We serve established corporate groups across various industries, including but not limited to renewable energy, roads and transport, pharmaceuticals, FMCG, automotive, education and specialty chemicals. Our offerings to these sectors include term loans, project financing and structured finance. In certain markets, we also provide developer financing to top-tier A and A+ developers.

BRANCH EXPANSION

Our branch expansion strategy has always focused on accessing the underpenetrated credit regions.

New branches are opened after understanding credit potential, analysing regional insights and serviceable locations as per the bureau scorecard. We increased our branch strength in FY25 by 37, taking the total to 449 branches as of 31st March 2025.

In line with our focus on retail and SME segments, most branches have been added in Tier III and Tier IV markets.

ROBUST ASSET QUALITY TRENDS

Gross stage 2 loans declined by 44 basis points on a year-on-year basis to 1.54% and gross stage 3 loans declined by 27 basis points on a year-on-year basis to 2.24% as of 31st March 2025.

The proportion of secured loans in the portfolio increased from 72% as of 31st March 2024 to 74% as of 31st March 2025. The provision coverage on gross stage 3 was 45.0% as on 31st March 2025 as compared to 49.9% as on 31st March 2024. Given the proportion of secured loans in our portfolio, we believe the provision coverage as of 31st March 2025 is quite adequate.

Particulars	Mar23		Mar24		Mar25
	%	Crore	%	Crore	%	Crore
Stage 1	94.16%	75,758	95.51%	1,00,942	96.22%	1,19,426
Stage 2	2.72%	2,187	1.98%	2,094	1.54%	1,914
Stage 3	3.12%	2,507	2.51%	2,649	2.24%	2,777
Stage 2 and 3	5.84%	4,695	4.49%	4,743	3.78%	4,692
Total Loan book	100%	80,452	100%	1,05,686	100%	1,24,118
Stage 3 PCR	46.2%		49.9%		45.0%

BORROWINGS

We continue to focus on diversifying the sources of borrowings and optimising the cost of borrowings. During FY25, we raised Rs. 3,228 Crore through ECBs. We leveraged our relationships with banks and financial institutions and raised long-term borrowing of Rs. 39,034 Crore in FY25. Outstanding borrowing at amortised cost was Rs. 1,11,136 Crore as of 31st March 2025 (31st March 2024: Rs. 92,292 Crore).

KEY FINANCIAL HIGHLIGHTS Financial performance

The net interest income (including fee income) increased by 10% year- on-year to Rs. 6,940 Crore in FY25. The net interest margin (including fee income) was 6.22% in FY25 (FY24: 6.90%). Operating expenses increased by 9% year-on-year to Rs. 2,136 Crore, driven by increase in branches, costs incurred towards business expansion and technology and digital-related expenses. The cost-to-income ratio improved by 30 basis points to 30.78% in FY25. The pre-provisioning operating profit increased by 11% to Rs. 4,804

Crore in FY25. Provisions increased by 7% year-on-year to Rs. 1,444 Crore in FY25. Credit cost improved by 19 basis points year-on-year to 1.31% in FY25. The profit before tax increased by 12% year-on-year to Rs. 3,360 Crore in FY25. The profit after tax increased by 13% year-on-year to Rs. 2,501 Crore in FY25. The return on assets was 2.27% in FY25.

Key Financials

Profit & Loss Statement (J Crore)	FY24	FY25
Gross Revenue"	12,436	14,522
Interest Cost	6,139	7,583
Net Interest Income	6,296	6,940
Operating Expenses	1,957	2,136
Credit Provisioning	1,352	1,444
Profit Before Tax	2,987	3,360
Tax	766	859
Profit After Tax	2,221	2,501
Key Ratios (in %)	FY24	FY25
Average Yield"	13.70	13.10
Interest Cost / Avg. Lending Book	6.80	6.88
Net Interest Margin"	6.90	6.22
Opex / Avg. Lending Book	2.17	1.94
Cost-to-Income Ratio	31.08	30.78
Credit Provision / Avg. Lending Book	1.50	1.31
RoA	2.46	2.27

" Includes Fee Income

OUTLOOK

We remain focused on simplifying finance for our customers while leveraging our digital capabilities to drive profitable growth. We will continue to focus on MSME segment, launch new products and grow the share of direct business. Leveraging our digital capabilities, we expect to deliver better TATs, enhance customer experience through mobile-friendly solutions with faster decision-making and better approval rate and improve our customer selection process. We will focus on increasing the share of personal and consumer and unsecured MSME loans going forward.

Our aim is to double our portfolio over the next three years. We expect the RoA to expand gradually, mainly driven by expansion in margins, improvement in productivity and change in product mix.

Housing Finance

Aditya Birla Housing Finance Limited (ABHFL) is registered with the National Housing Bank as a housing finance company under the National Housing Bank (NHB) Act, 1987. At ABHFL, we have created a full-stack franchise focused on both prime and affordable segments. We offer a comprehensive range of housing finance solutions covering home loans, home extension loans, home construction loans, home improvement loans, loan against property (LAP), construction financing, lease rental discounting (LRD), commercial property purchase loan. ABHFL holds a long-term credit rating of AAA (stable) by ICRA, AAA (stable) by India Ratings and AAA (stable) by Crisil.

INDUSTRY OVERVIEW

Indias housing finance market has witnessed strong growth, driven by increasing home ownership aspirations, government policy support and improving affordability. As of October 2024, the housing loan market was Rs. 37.2 trillion, representing a 14% year-on-year growth. Within this, the prime housing loan segment accounted for Rs. 25.1 trillion registering a strong 20% year-on-year growth, while affordable housing loans were Rs. 12.2 trillion, representing a 6% year-on- year growth. In the LAP segment, the total outstanding portfolio was Rs. 11.1 trillion, marking a robust 23% year-on- year growth.

Indias housing and housing finance sectors are poised for sustained growth, driven by rising affordability, urban migration and evolving consumer preferences. Strong policy support, increasing mortgage penetration and expanding credit access continue to enhance sectoral momentum. The government has announced various measures such as expansion in Pradhan Mantri Awas Yojna (PMAY) and increased investments in affordable urban housing. The long-term outlook remains robust, with housing demand expected to accelerate, creating significant opportunities for developers and lenders alike.

BUSINESS OVERVIEW

ABHFLs priority is to build a digital and analytics backed retail housing franchise catering to the housing needs of salaried, self-employed and professionals running microbusinesses across tier-I suburbs, tier-II and tier-III cities with optimum credit quality. We currently service more than 91,200 customers and our AUM stood at Rs. 31,053 Crore as of 31st March 2025, representing a robust growth of 69% year-on-year. The total disbursements grew by 109% year-on- year to Rs. 17,648 Crore in FY25. Of the total AUM, Rs. 17,265 Crore or 55.6% was housing loans, Rs. 9,382 Crore or 30.2% was LAP and Rs. 4,406 Crore or 14.2% was construction finance.

DISTRIBUTION

ABHFL has presence in 18 states and Union Territories and more than 130 cities. Its distribution network of 175 branches services 8,143 pin codes covering ~ 85% of total origination opportunity. In FY25, our analytics driven micro-market penetration strategy has helped scale business in top 10 cities by 88%. We have extended our avenues of distribution for Aditya Birla Group (ABG) Ecosystem to ABG Companies, employees and distributors. About 12% of retail disbursements in FY25 were from ABCL and ABG ecosystem.

DIGITAL TRANSFORMATION

ABHFL embarked on a transformational journey with digital and analytics being the core drivers. Digital platforms and analytical models were developed based on customer life cycle: prospecting, fulfilment, servicing and collections.

Launched in April 2023, Finverse implemented key digital interventions in 2024 to enhance credit /operational efficiency and regulatory compliance.

Efficiency focused initiatives include a multi-vendor account aggregator, delegation of credit authority, automated credit analysis memo (CAM), and existing exposure auto fetch. On the regulatory front, Finverse introduced key facts statements (KFS) and risk categorisation to ensure transparency and adherence to compliance standards.

DATA ANALYTICS

We have built and deployed 24 analytical models across the customer journey, from demand generation to collections. These models drive data-driven decision making in key areas such as credit underwriting, risk assessment, portfolio management, fraud detection and customer engagement, ensuring sharper insights and improved efficiency.

IMPROVING ASSET QUALITY

Gross stage 2 and 3 loans were brought down by 152 bps year-on-year from 2.91% as of 31st March 2024 to 1.39% as of 31st March 2025. The provision coverage on gross stage 3 loans increased from 33.0% as of 31st March 2024 to 55.0% as of 31st March 2025.

We launched an end-to-end debt management platform called FinCollect. It utilises analytics for effective debt management, including a predelinquency model for bounce prediction and a flow prediction model for the 3089 days past due (DPD) pool.

Particulars	Mar23		Mar24		Mar25
	%	I Crore	%	I Crore	%	I Crore
Stage 1	95.01%	13,120	97.09%	17,358	98.61%	28,781
Stage 2	1.76%	243	1.08%	194	0.73%	212
Stage 3	3.23%	446	1.82%	325	0.66%	193
Stage 2 and 3	4.99%	668	2.91%	519	1.39%	405
Total	100.0%	13,808	100.0%	17,877	100.0%	29,186
Stage 3 PCR	31.9%		33.0%		55.0%

ASSET LIABILITY MANAGEMENT

Asset liability management is addressed optimally and within the norms stipulated by NHB. ABHFL is well positioned to meet its liquidity needs by maintaining positive ALM.

BORROWING PROFILE

We source funds from various avenues including banks in the form of working capital and term loans, NHB refinance and from the money market through non-convertible debentures (NCDs) and commercial papers (CPs). During FY25, ABHFL borrowed Rs. 4,805 Crore through bank borrowing and Rs. 753 Crore through NHB. ABHFL also raised Rs. 6,340 Crore through private placement of secured NCDs. The borrowing profile as on 31st March 2025 is shown below:

FINANCIAL PERFORMANCE

Net interest income (including fee income) increased by 38% year-on-year to Rs. 1,126 Crore in FY25. Net Interest Income (including fee and other income) was 5.07% in FY25 (FY24: 5.39%). Operating expenses increased by 47% year-on-year to Rs. 653 Crore in FY25. Operating expenses-to-average Book was 2.94% in FY25. We have made significant investments in distribution, data, digital and emerging technologies to sustain the current growth momentum in future. Operating profit increased by 27% year-on-year to Rs. 473 Crore in FY25. Credit cost was 24 basis points in FY25 (FY24: - 3 basis points). Profit before tax increased by 11% year- on-year to Rs. 419 Crore in FY25. Profit after tax increased by 11% year-on- year to Rs. 323 Crore in FY25. Return on assets was 1.46% and return on equity was 11.03% in FY25. The tier-1 capital adequacy ratio was 14.30% and total capital adequacy ratio was 16.54% as of 31st March 2025. The debt-to-equity ratio was 6.90x as of 31st March 2025.

(J Crore)	FY24	FY25
Net Interest Income (Incl. fee income)	815	1,126
Operating expenses	443	653
Operating profit	372	473
Credit provisioning	-5	54
Profit before tax	376	419
Tax	86	96
Profit after tax	291	323
Net Worth	2,260	3,783
Borrowings and debt securities	15,947	26,102

 

Key ratios (in %)	FY24	FY25
Effective Interest rate (EIR)	11.25	10.81
Net Interest cost / Avg. Loan book	6.52	6.67
Other Income / Avg. Loan book	0.65	0.94
Net Interest Income (Incl. Fee Income)	5.39	5.07
Opex / Avg. Loan book	2.93	2.94
Cost-to-income Ratio	54.35	57.98
Credit Provisioning/ Avg. Loan book	-0.03	0.24
RoA	1.92	1.46
RoE	13.87	11.03
Debt-to-equity	7.06	6.90
Total CRAR	16.79	16.54
Tier -1	14.66	14.30

NII including fee (net of DSA Expenses and Processing Cost)

OUTLOOK

The operating environment continues to provide multiple opportunities for growth. The government announced an expansion of PMAY in FY25 along with various investments in affordable housing sector. We have made various investments in digital properties, technology, people and distribution. ABHFL remains committed to implementing its strategy across diverse product lines and segments to stimulate and capitalise on the next growth phase.

Going forward, we expect the current growth momentum to continue and gain market share. As the portfolio scales up further, we expect operating leverage to kick in and RoA to improve significantly. Our aim is to achieve an RoA of 2.0%- 2.2% in the next eight to ten quarters.

Growth

• Accelerate growth in prime & affordable segments with average ticket size of 25 — 30 Lakhs

• Growth to be augmented by ABG ecosystem

Service excellence

• To be the most preferred choice of our customer

• Digital capabilities for seamless customer onboarding and servicing

• Building a culture of spotting opportunities with customers at center

Distribution network

• 175 branches as of Mar 31, 2025, covering ~ 85% of TAM

• Sourcing driven by micro market penetration strategy

• Deeper engagement with ABG ecosystem

Digital reinvention

• Develop assisted/ DIY customer journeys with Effective lead management

• Seamless distributor onboarding

• Significant reduction in TAT, increased face time with customers

Asset Management

Since 1994, Aditya Birla Sun Life AMC Limited (ABSLAMC) has been one of Indias leading asset management companies. We offer customers a wide variety of investment solutions focused on regular income, wealth creation and tax savings, among others.

INDUSTRY OVERVIEW

In FY25, the mutual fund industry witnessed significant growth and resilience, marked by increased investor participation and strong fund performance despite market volatility and global uncertainties. Net equity sales of Rs. 5.4 Lakh Crore were recorded in FY25 through new fund offerings and existing funds. Within the existing equity and hybrid categories, sectoral/ thematic, arbitrage, flexi cap, small cap and multi cap funds schemes saw the highest net inflows.

• The industrys average assets under management (AAUM) for the quarter ended on 31st March 2025 reached Rs. 67.42 lakh Crore, recording a growth of 25% over the same period last year

• The industrys equity AAUM stood at Rs. 39.98 lakh Crore for the quarter ended 31st March 2025, a growth of 29% from the same period last year

• The inflows to mutual funds via systematic investment plans (SIPs) have been on an upswing during FY25, rising by 35% year-on-year to Rs. 25,926 Crore in March 2025

• The total number of mutual fund investors increased by 32% year- on-year from around 18 Crore as of 31st March 2024 to 24 Crore as of 31st March 2025

• The retail investors monthly average AUM (MAAUM) increased by 21% year- on-year to Rs. 40.31 lakh Crore in March 2025 and contributed 60% of the total MAAUM.

• The mutual fund monthly average AUM from B30 cities was Rs. 12.17 Lakh Crore in March 2025 and accounted for 18% of the total AUM.

PERFORMANCE OVERVIEW

Our overall Quarterly Average Assets under Management (QAAUM) for the quarter ended 31st March 2025 was Rs. 4,05,641 Crore, a growth of 17% year-on-year. Mutual fund QAAUM for the quarter ended 31st March 2025 was Rs. 3,81,724 Crore, representing a growth of 15% year on year, with market share of 5.7%. Mutual fund Equity QAAUM for the quarter ended 31st March 2025 grew by 11% year-on- year to Rs. 1,69,065 Crore with a market share of 4.2%.

We have a seen a positive momentum in sales driven by improved investment performance and strong engagements of our sales team. Operating revenue (excluding other income) increased by 25% year-on-year to Rs. 1,685 Crore in FY25. Operating profit (profit before tax excluding other income) grew by 31% year-on-year to Rs. 944 Crore in FY25. Other income increased by 5% to Rs. 301 Crore in FY25. The profit before tax grew by 23% year-on-year to Rs. 1,245 Crore in FY25 and profit after tax grew by 19% year-on-year to Rs. 931 Crore in FY25.

GROWING SIP BOOK

SIPs have become a preferred investment choice for retail investors.

As a key player in the industry, we have undertaken initiatives to increase traction in SIPs. Our constant endeavour is to build our SIP book and ensure customer stickiness while creating long-term value for investors. As a result of these efforts, our SIP book (including STPs) reached Rs. 1,316 Crore in March 2025, marking a 5% increase from Rs. 1,252 Crore in March 2024.

CUSTOMER ACQUISITION

Customer acquisition continues to be a key focus area for our Company. We added approximately 27 lakh new folios in FY25 and our total folio count crossed 1 Crore as of 31st March 2025.

INCREASING RETAIL FRANCHISE WITH A FOCUS ON B30 MARKETS

Over the last few years, we have dedicated our efforts to expanding our retail franchise and growing our geographical presence across B30 cities. We have expanded our pan-India presence to over 300 locations, with more than 80% located in B30 cities. Individual MAAUM grew by 6% year-on- year to Rs. 1,84,471 Crore in March 2025. The B30 MAAUM grew by 12% year-on- year to Rs. 64,534 Crore in March 2025.

MULTI-CHANNEL DISTRIBUTION NETWORK STRATEGY

As part of our overall strategy, we are focused on building the retail sales segment across all markets. We have been strengthening our multi-channel sales ecosystem and distribution network by integrating key levers of direct channel, emerging markets, virtual relationship manager (VRM), service to sales and Sampark. Our multichannel market initiatives, aimed at deepening our presence, have yielded positive results.

• Direct channel aims to provide personalised attention and tailored solutions to meet the unique needs and preferences of high-net-worth clients, targeting increased presence beyond top 8 locations across India.

• Emerging Markets aim to tap into potential rural and emerging markets at an early stage to build growth.

It also aims at deepening product awareness through continuous engagement drives for investors and distributors

• VRM enhances the new distributor experience through virtual assistance and guidance, focusing primarily on increasing activations, SIPs, and gross sales. It aims to upgrade Mutual Fund

Distributors (MFDs) to high-potential business partners and integrate them into Retail Sales. It focuses on the new MFDs to help them achieve their financial goals

• Under Service to Sales, service RMs effectively engage with investors and facilitate their investment decision. They identify opportunities for win back, retention and upselling

• Sampark, our distribution expansion initiative, empanels and onboards new distributors. It follows a one- click, end-to-end digitally enabled distributor empanelment journey to make the process seamless.

DISTRIBUTION STRENGTH

In FY25, our Company expanded its pan-India network of empanelled distributors to include more than 89,000 MFDs, 330 national distributors, and more than 90 banks. We continue to expand our distributor base and have empanelled more than 10,500 new MFDs during the reporting period.

SCALING UP THE PASSIVES AND ALTERNATE ASSET BUSINESS Passives

Our passive AUM grew over 3 times from Rs. 9,962 Crore as of 31st March 2022 to Rs. 34,694 Crore as of 31st March 2025. We expanded our existing product suite to include 53 products. The customer base in this category has also grown to around 11,60,000 folios, increasing 3 times from 31st March 2022. Additionally, the company holds the top rank in the index debt category based on average AUM for the quarter ended 31st March 2025.

ALTERNATE ASSET BUSINESS

To meet the growing needs of HNIs and family offices, we have strengthened the alternative business team to enhance PMS and AIF offerings in both equity and fixed income. Our PMS/AIF asset grew by 3.7 times year-on-year to Rs. 11,330 Crore for the quarter ended 31st March 2025. During FY25 we also won the Employees State Insurance Corporation (ESIC) mandate under the advisory route and have started portfolio management for ESIC. We have also launched the Performing Private Credit Opportunity fund under AIF offering. In order to grow our size in this category, both from domestic and global investors, we have committed our own capital to support the growth of this fund out of our treasury portfolio.

On the offshore front we have successfully completed fund raising for ABSL Global Emerging Market Equity

Fund. Currently fund raising is underway for India ESG Engagement Fund, ABSL Flexi Cap Fund, ABSL Global Bluechip Fund. The offshore AUM grew by 14% year-on-year to Rs. 12,070 Crore during the quarter ended 31st March 2025.

On the real estate front, our AUM was Rs. 491 Crore for the quarter ended 31st March 2025. Currently fund raising is underway for Aditya Birla Real Estate Credit Opportunities Fund (Cat II AIF).

Financial Performance

(I Crore)	FY24	FY25
Revenue from Operations	1,353	1,685
Costs	632	741
Operating Profit	721	944
Other Income	287	301
Profit before tax	1,008	1,245
Tax	228	314
Profit after tax	780	931

OUTLOOK

ABSLAMC has been a leading investment manager that has worked to achieve financial inclusion, deepen financial markets and develop the mutual funds industry. Our strategy remains rooted in our customer-first ethos and our commitment to serve investors over the long-term through holistic investment solutions and consistent investment performance. With a steadfast commitment to investor interests, our primary focus is on customer experience through a strong risk management and governance framework, research- backed fund management and technology-backed service delivery. This commitment has helped us to build our AUM size over the years and develop a robust customer base. While these fundamental principles have enabled ABSLAMC to establish itself in the mutual fund space, they will also guide it towards accelerated growth in the alternative asset space.

Retail franchise

• Scale up retail franchise and diversify product offerings

• Focusing on Direct/HNl Channel to provide incremental growth

• Drive growth in SIP flows

Passive & alternative investments

• Focus on scaling alternative assets business including AIF, PMS and Real Estate

• New product launches in equity and fixed income AIF and scale up existing PMS portfolios

• Increase presence among institutional investors

Digital & distribution

• Leverage digital platforms for seamless delivery

• Expand geographic reach and strengthen multi-channel distribution network

• Leverage One ABC locations to increase reach and contribution from cross sell and up sell

Life Insurance

Aditya Birla Sun Life Insurance Company Limited (ABSLI) is a 51:49 joint venture between the Aditya Birla Group and Sun Life Financial Inc., Canada. ABSLI has contributed immensely to the growth and development of the Indian life insurance industry and is currently one of Indias leading private life insurance companies. ABSLI offers a range of products across the customers lifecycle, including protection plans, children future plans, wealth protection plans, retirement and pension solutions, health plans, traditional term plans and unit-linked insurance plans (ULIPs).

INDUSTRY OVERVIEW

In the post-Covid world, the importance of having insurance has gained a lot of prominence among the salaried as well as the non-salaried class. Insurance not only acts as a cushion against an unfortunate circumstance, but it is also considered a traditional tax-saving instrument. With changes in taxation regime, for traditional products greater than Rs. 5 lakh, some shift is expected in the next couple of years. With the increase in disposable income across India and knowledge on the importance of insurance post COVID, the outlook for the insurance sector is positive.

Owing to fluctuating interest rates and the need to safeguard the return on investment, The customer demand for guaranteed products have risen over the years. FY23 saw an exceptional surge in demand for traditional savings products. In FY24 and FY25 the demand has shifted to ULIPs due to changes in taxation and buoyant capital markets.

New alternatives like return of premium products, value-added riders, index- Linked and combo products are being launched to push protection sales growth and expand margins. These new products, combined with awareness campaigns, are expected to lift growth in the retail protection segment. Predominantly considered a push product, individual protection products have seen faster acceptance by the affluent segment.

PREMIUM GROWTH

ABSLI was the fastest growing major player in FY25 with individual first year premium (FYP) growing by 34% year-on- year to Rs. 4,115 Crore. The individual FYP of private players grew by 15% year-on-year and overall industry grew by 10% year- on-year in FY25. This resulted in a 68 basis points year-on-year increase in private market share to 4.8% in FY25. Group new business premium grew by 23% year-on- year to Rs. 5,586 Crore in FY25. The steady growth in group new premium was driven by credit life and fund business. The group new business premium of private players grew by 5% and overall industry grew by 1%. This resulted in a 112 basis points year-on-year increase in private market share to 8.4% in FY25. Our industry position in the group new business improved to 4 in FY25.

PRODUCT AND DISTRIBUTION MIX

There has been a shift in ULIP mix in FY25 due to increased demand, mostly on account of buoyant capital markets. The proportion of ULIP in individual FYP increased from 24% in FY24 to 35% in FY25. We plan to optimise the contribution of ULIP products to our overall topline and move towards innovative traditional products.

ABSLI has always positioned its products based on their unique features and customer benefits. In FY25 we launched 4 new products - 2 ULIPs and 2 protection- based products. We successfully launched our group to retail product - Insta Digi Plan as a specialised term plan for employees of our group term clients. The new products contributed to 12% of the individual FYP in FY25.

During FY25 we witnessed a strong growth across both proprietary and partnership channels. Our proprietary channels of agency and direct grew 33% year-on-year in FY25, driven by better productivity as well as by capacity added last year. The partnership business grew at 34% year-on-year with robust growth across all our existing partners as well as the new partnerships in Bank of Maharashtra, IDFC First Bank and Axis Bank where we managed respectable mindshare in our first full year of operations. We now have 11 bank partnerships with a reasonable mix of large private sector banks as well as regional private sector banks and 2 PSU banks. We have recently entered into a new partnership with Equitas Small Finance Bank in FY25, which will begin business in FY26.

During the year, we opened 60 new branches and invested capacity in new tie-ups to fuel our growth. In the next year we intend to capitalise on this and grow largely on the back of enhanced productivity.

RENEWAL PREMIUM AND PERSISTENCY

Renewal premium grew by 14% year-on-year to Rs. 10,419 Crore in FY25. The growth was on account of higher new business growth in the previous year, improved persistency and continuous demonstration of the customers trust. We are among the top quartile in the industry in terms of 13th and 61st month persistency. 13th Month Persistency grew to 88.44% (FY24: 88.05%) and 61st Month to 62% (FY24: 62%). Individual renewal premium collection by ZARA (AI based bot) grew by 34% year-on-year to Rs. 981 Crore in FY25.

ADOPTING A DIGITAL MINDSET

Embracing modern technology is essential for any organisation that intends to ensure faster deliveries, reduced spending and enhanced customer experience. The three- to-five-year digital transformation plan depends on creating a culture of continuous learning and requires employees to develop a digital mindset.

ABSLI has digitised its front-end and back-end processes, covering all the major milestones of the policy life cycle. We are consistently investing in assets which would enable us to issue policies instantly. It features customer acquisition assets like pre-sales app for lead generation management, prospective app sales buddy for assisting advisors and LEAP for managing new business digitally, among others. We have also automated an AI-driven underwriting system, which enables us to auto underwrite policies and acts as an aid to intelligence for acquiring new risk consciously.

We also have a new claims processing system targeted towards auto claim clearance to reduce TATs and increase customer satisfaction. Contribution of pre-approved sum assured (PASA) in individual business increased from 28% in FY24 to 37% in FY25.

VALUE CREATION AND PROFITABILITY

We continue to have a diversified product portfolio. A diversified product strategy helps in safeguarding against capital market volatility, regulatory changes and changes in customer behaviour. During the year, we have endeavoured to maintain a balanced mix with controlled proportion of ULIP. Expected maturity benefits of the guaranteed portfolio are entirely hedged. We have entered into Forward Rate Agreements (FRA) to protect 100% expected maturity and survival benefits for guaranteed benefits of policyholders in low-interest rate scenarios. The new products launched in FY25 are expected to generate good traction going forward.

The new surrender guidelines came into effect from 1st October 2024. These guidelines increase the surrender value of policies surrendered after first year and adversely impact the value of new business. We have taken various steps such as increasing rider attachment, realigning commission structure and changing the product pricing to mitigate this impact. These steps along with the high quality of business has helped us to attain a net VNB margin of 18% in FY25. The value of new business in absolute terms increased by 17% year-on-year to Rs. 818 Crore in FY25.

Given the investments made in proprietary channels and deepening our distribution, the operating expenses- to-premium was 20.4% in FY25 (FY24: 18.5%).

The embedded value increased by 20% year-on-year to Rs. 13,812 Crore as of 31st March 2025 mainly due to unwinding of in-force profit and in line with operating and assumption variance. The return on embedded value was 19.2% in FY25.

The profit before tax was Rs. 158 Crore in FY25 (FY24:1 198 Crore). The profit after tax was 1 90 Crore in FY25 (FY24: 1 132 Crore).

OUTLOOK

The guiding lines for the future have been growth, long-term value accretion and stable statutory profit while excelling in all quality parameters. The management has identified and put in place a comprehensive action plan and is actively monitoring all risk areas. We will continue to strengthen our competitive and financial position by focusing on the following strategic priorities:

Profit and loss statement and key ratios

(I Crore)	FY24	FY25
Individual First year Premium1	3,546	4,633
Group First year Premium	4,554	5,587
Renewal Premium	9,160	10,419
Total Gross Premium	17,260	20,639
Operating expenses (Incl. Commission)	3,191	4,206
Profit Before Tax2	198	158
Profit After Tax2	132	90
Key ratios (in percent)	FY24	FY25
Opex to Premium (Incl. Commission)	18.5%	20.4%
Solvency Ratio	178%	188%

1. Single premium @100% 2. Consolidated nos. including Aditya Birla Sun Life Pension Management Company Limited

Health Insurance

Aditya Birla Health Insurance (ABHI) is a Standalone Health Insurance player (SAHI). It was incorporated in 2015 and commenced operations in October 2016. ABCL, MMI Strategic Investments and Abu Dhabi Investment Authority hold 45.89%, 44.08% and 10.03% stake in ABHI, respectively. ABHI was the fastest-growing SAHI player in FY25. Driven by its ‘Health First business model, backed by a strong brand and differentiated product offerings, it is well placed to capitalise on the growth opportunity in the health insurance space.

INDUSTRY OVERVIEW

Health insurance (HI) continues to be the fastest growing segment amongst various general insurance segments with a year-on-year growth of 9% in comparison to the growth of 4% in other GI segments in FY25. In the HI space SAHI players have a market share of 30% and a year-on-year growth of 16% for FY25. The industry posted a 3-year CAGR of 16% for FY25 with SAHIs growing faster than the market with a CAGR of 23%. Health insurance penetration in the country continues to be low and there is ample opportunity for growth. The governments focus on Insurance for all by 2047 and its transition from a provider of services to funder of services is expected to add impetus to the health insurance industry.

INDUSTRY STRUCTURE

In FY24, the Insurance Regulatory and Development Authority of India (IRDAI) introduced major regulatory changes as part of its long-term goal of achieving Insurance for All by 2047. The regulatory framework was streamlined with the replacement of 34 existing regulations with 6 simplified regulations and the addition of 2 new regulations. This move aimed to improve clarity, consistency and the ease of doing business in the insurance sector.

In FY25, the regulator has given licenses to 2 new health insurance players.

The industry now has a total of 34 players comprising 4 PSU insurers, 23 Private Multi-line players and 7 Stand Alone Health Insurers (SAHI). PSU insurers continue to cede market share with overall share of 36% in FY25 as compared to 48% in FY19. The share of private multi-line players increased from 30% in FY19 to 34% in FY25 and SAHI players increased from 22% in FY19 to 30% in FY25.

PERFORMANCE REVIEW

ABHI continues to be one of the fastest growing health insurance companies.

Its gross written premium (GWP) grew by 33% year-on-year to 4,940 Crore in FY25. Excluding the impact of 1/n accounting norm, GWP grew by 42% year-on-year to Rs. 5,252 Crore in FY25.

We covered about 22 million lives, as of 31st March 2025. Retail business grew by 44% year-on-year and contributed to 53% of total GWP in FY25. ABHIs GWP has grown by a CAGR of 44% from FY22 to FY25 compared to SAHI industry CAGR of 25%. ABHI has achieved a breakeven in its eighth full year of operations with a net profit of Rs. 5 Crore in FY 25. The combined ratio improved to 105% in FY25 from 110% in FY24.

RETAIL DISTRIBUTION MIX AND BUSINESS GROWTH Delivered Robust growth in Core business

ABHIs core strategy is centred around the integration of health and wellness into insurance, promoting proactive health management and enhancing customer engagement.

With a digitally enabled ecosystem and an expansive distribution network, we are poised to meet the evolving needs of diverse customer segments across India. The value proposition of ABHI has always been geared away from traditional insurance. The data led customer understanding has enabled us to introduce products with benefits of embedded wellness and health management. The products are structured around the pillars of (1) Know Your Health (2) Improve Your Health and (3) Get Rewarded.

Our Differentiated Health-First model continues to show maturity.

In FY25, 9% of eligible customers earned good health-based incentives - HealthReturns, up from 6% last year, reflecting deeper engagement with our wellness ecosystem. The outcomes for some of the intervened cohorts are now visible. The percentage of customers influenced by participation in healthy behaviour has crossed 25% on an enlarged customer base. We have invested in building deep capabilities for managing customers with high health risk. Through a combination of in-house health Coaches and our partners, we have intervened in more than 1,30,000 high risk lives to improve their health vitals, leading to lower claim ratios. These customers continue to exhibit lower loss ratios and better persistency. Overall, this has kept our retail loss ratio well in control.

SCALED UP DISTRIBUTION MIX

Despite being a new entrant, we have accelerated growth across distribution channels, comparable to industry veterans. We maintain a diversified mix of business across both distribution channels and product lines, enabling resilience against market fluctuations. This broad-based approach ensures widespread market presence and business stability. Furthermore, we offer a comprehensive product portfolio tailored to varied customer needs, with a strategic focus on delivering value to our stakeholders.

Our long-term goal is to increase the share of proprietary channels and we have made significant investments to this effect. The channel now has a presence across more than 225 branch locations and access to more than 140,000 agents. This focus and investments have yielded rich dividends. The proprietary channel has experienced 38% year-on-year growth, with a contribution of 30% in retail GWP. We continue to leverage our strategy of One ABC to drive agent growth and cost effectiveness across the channel.

We continue to be a pioneer in bancassurance distribution. We have distribution tie-ups with 14 private banks and 5 PSU banks. We have a significant focus on augmenting capacity by acquiring new relationships.

The GWP of group business grew by 40% year-on-year to Rs. 2,494 Crore in FY25.

In the group business segment, there is also a focused effort to strengthen presence in commercial segments like SMEs and MSMEs, while sustaining a strong foothold in the large corporate and government sectors.

PRODUCT INNOVATION

In the past eight years, we have continued to lead in product innovation, extending our offerings to senior citizens, millennials, same sex and live in partners and women, with a growing focus on holistic well-being, including mental health and nutrition. Our first in the industry, the Chronic Management Program, set new standards of excellence. To address hesitancy among some customers in buying health insurance, we created contextual bytesized offerings, at an affordable cost. We pioneered two benefits in our product suite: Incentivised Wellness and Health Management Program. These two benefits are structured on the three pillars of Know Your Health, Improve Your Health and Get Rewarded.

Most of our products continue to be top ranked in their respective categories and we continue to be cognisant of the fact that our offerings have become an industry norm, adopted both by competition and the regulator.

Our digital first approach has led to a wide suite of relevant digital assets. The digital assets suite includes industry first multi-lingual app, industry first customer journeys in WhatsApp, bots and the traditional website. The principles and culture around which the entire digital edifice has been constructed includes agility, scalability, security, modularity, cloud agnostic etc.

There are more than 40 live features on our Activ Health App. The app has more than 3.8 million downloads. The app is a state-of-the-art property with simplified customer journeys which apart from providing policy details and renewal management facilities can be used for various other aspects like health and nutrition, wellness scores and health management. The Activ Health App is the customer touchpoint across acquisition, renewal management, servicing and health management.

DIGITAL, DATA AND ANALYTICS

Given the increasing footprint of the digital channel and platforms, digital metrics represent a larger proportion of our business each quarter. In FY25, Our Activ Health App downloads grew by 125% year-on-year, while Monthly Active Users (MAUs) saw a 48% increase over the previous year — reflecting strong digital traction and deeper customer engagement. We see a consistent increase in these metrics, and this is enabling scale, efficiencies and cost optimisation across the business.

As a new age business born in the times of big data, we have integrated analytics into each aspect of our business. Data capabilities include the ability to analyse both structured and unstructured data. The Company has built a data lake with capabilities for managing and analysing both structured and unstructured data from multiple sources. There exists strong in-house capabilities around data analytics, artificial intelligence, machine learning, natural language processing etc. In our thrust on digital, we are also constantly evaluating and investing in our data capabilities.

Key Financials

(I Crore)	FY24	FY25
Retail premium	1,915	2,759
Group Premium	1,786	2,494
Gross written premium (without 1/n)	3,701	5,252
Gross written premium (with 1/n)	3,701	4,940
Revenue	3,450	4,622
Operating expenses (including claims)	3,632	4,616
Profit Before Tax (Without 1/n)	(182)	75
Profit Before Tax (With 1/n)	(182)	6

OUTLOOK

Looking ahead, we remain optimistic about the long-term growth prospects of the health insurance sector. Our differentiated business model will help us to be the fastest growing health insurer and gain market share. But for the change in regulatory guidelines, we were on track to achieve a combined ratio of 100% in FY26. However, our endeavour still remains to achieve a combined ratio of 100% at the earliest.

Stocks and Securities

Aditya Birla Money Limited (ABML) is a one-stop shop for customers for their entire investment and trading needs. ABML offer a full range of services related to investment in stocks, mutual funds, IPOs, SGBs, PMS, among others and trading in equity, commodity and currency derivatives. The product and service innovations enable differentiated experiences for customers

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian broking industry witnessed a landmark year in FY25, marked by a two-phase narrative of exceptional growth and returns followed by regulatory moderation and global headwinds. During the first three quarters of the fiscal, the industry achieved record performance driven by buoyant primary and secondary market activity, robust retail participation and sustained inflows into equity mutual funds.

The retail broking business continues to improve its product offerings through digital initiatives. The rise of discount brokers has made it easier to invest in capital market products. Benefits in the form of zero brokerage, e-KYC, UPI integration and user-friendly platforms have made investing seamless and intuitive. It has taken investor participation to new highs in FY25, also reflecting the growing democratisation of capital markets in India. FY25 saw a record 4.11 Crore new demat accounts opened, a growth of 11% year-on-year, pushing the total to 19.24 Crore. On the primary market front, 78 mainboard IPOs and 239 SME IPOs cumulatively raised Rs. 1.72 Lakh Crore - surpassing the cumulative totals of the previous two years.

Retail investors continued to dominate market flows, supported by growing financial awareness and digital enablement. The number of active traders on the NSE increased nearly five-fold since FY2020, reaching approximately 5 Crore by October 2024. Mutual fund participation also saw substantial growth, with unique retail investors rising to more than 5 Crore and SIP registrations touched record highs. While aggressive FII outflows continued to challenge the Indian equity markets in H2FY25, domestic retail and institutional flows provided a resilient counterbalance, reinforcing the trend of localisation in market ownership. Despite headwinds from FPI outflows, regulatory intervention, geopolitical tensions and ongoing policy uncertainty, Indian markets displayed structural resilience as the benchmark indices managed to outperform most developed and emerging markets. For FY25, Nifty 50 gained ~5% while Nifty Midcap 100 was up 5.4% and Small cap index extended by 7.5%.

FINANCIAL PERFORMANCE

ABMLs revenue from operations grew by 15% year-on-year to Rs. 448 Crore in FY25 mainly led by higher interest income, higher fees and commissions. The profit after tax grew by 40% year- on-year to Rs. 74 Crore in FY25.

OUTLOOK

RBI expects Inflation to average at 4% in FY26, assuming a normal monsoon. The Indian economy is expected to be one of the fastest growing major economies in FY26, mainly backed by strong domestic drivers and strengthening macroeconomic fundamentals. With softening commodity prices, India Inc is likely to witness some relief on the input cost, thereby driving its gross margins. Further, most companies have now adopted the risk of managing supply side challenges along with cost optimisation measures which can uplift their margins. Governments impetus on growth and capex and boosting domestic consumption was visible through a balanced Budget for FY26. It showcased a strong balance between fiscal prudence and consumption boost.

The India growth story remains one of the best over medium to long-term in a world overflowing with structural and demographic challenges. The governments strong impetus on growth and continued emphasis on infrastructure is visible through the capex allocation of Rs. 11.21 lakh Crore for FY26, i.e. 3.1% of GDP. Strong policy initiatives in the form of Aatmanirbhar Bharat, Make in India, Heal in India, Dekho Apna Desh and PLI schemes are expected to take India to the next level of growth in the coming years.

Standalone financial performance

The standalone profit after tax excluding gain on sale of stake in subsidiaries grew by 15% year-on-year to J 2,714 Crore in FY25. The return on equity, excluding one-offs and adjusted for dividend income and investments in subsidiaries, JVs and associates was 14.1% in FY25 (FY24: 15.8%). The total capital adequacy ratio was 18.22% and tier Rs. ratio was 15.94% as of 31st March 2025. The debt-to-equity ratio was 4.41x and the standalone total net worth was J 25,194 Crore as of 31st March 2025.

Profit and loss statement and key ratios

(in H Crore)

Profit & Loss Statement	FY24	FY25	Y-o-Y
Interest income	12,134	14,029
Fee and other income	777	1 ,004
Total income	12,911	15,033	16%
Interest expense	6,469	7,981
Net Interest income	6,442	7,052	9%
Dividend income	78	237
Employee expenses	969	1,119
Other expenses	1 ,050	1 ,078
Total expenses	2,018	2,197	9%
Credit Provisioning	1 ,356	1,448
Profit before tax	3,147	3,644	16%
Tax	778	930
Profit after tax	2,369	2 714	15%
Gain on sale of stake in subsidiaries/associates (net of tax)	566	243
Reported profit after tax	2,935	2,957
Return on equity1	15.8%	14.1%

1. Excluding gain on stake sale and adjusted for dividend income and investments in subsidiaries, JVs and associates

Standalone balance sheet and key ratios

(in H Crore)

	Mar-24	Mar-25
Loans	1,03,916	1,22,345
Investments	11 ,635	12,829
Other financial assets	1,379	2,870
Non-financial assets	1,138	1 ,256
Total assets	1,18,069	1,39,300
Borrowings & debt securities	92,292	1,11,136
Other financial liabilities	3,260	2,573
Non-financial liabilities	483	398
Net worth	22,034	25,194
Total liabilities and equity	1,18,069	1,39,300
Debt-to-equity	4.19	4.41
Tier 1 ratio	16.95%1	15.94%
Total CRAR	18.97%1	18.22%

1. unaudited

RISK MANAGEMENT

At ABCL and our subsidiaries, we attach great importance to the identification, measurement, and control of risks. All the functions are responsible for the management of risks. The Board of Directors and our Risk Management Committee monitor the process of risk management and give suitable directions to the management to adopt appropriate risk control measures. Traditional risk and control indicators serve an important purpose for financial institutions to determine their risk appetite. Technology has made it possible to use an increasing amount of data in analysing risk scenarios and identifying their possible impact on business strategies. At Aditya Birla Capital, we have created a framework that combines the traditional approach and modern data-driven approach to facilitate risk management. Against the backdrop of this credit environment and general macroeconomic factors playing out across sectors, we remain confident of our integrated risk and governance approach, which has demonstrated the capability to withstand economic and credit cycles, as well as dynamically adopt new scenarios and learnings into the risk and governance framework. We are well-positioned to accelerate our growth across all lines of business, given our strong risk architecture, coupled with our strong management capability, robust capital, liquidity management and high governance standards.

OPPORTUNITIES AND THREATS

Opportunities: The outlook for financial services remains promising due to structural growth drivers. NBFCs and housing finance firms benefit from increasing financial inclusion, digital adoption, and demand from underserved markets. Mutual funds are seeing a surge in retail participation, SIP growth, and product innovation. Life insurance has vast untapped potential in rural areas, supported by tax incentives and digital distribution. Health insurance is gaining traction post-COVID, with government schemes and tech-driven services enhancing accessibility. These trends present a fertile ground for innovation, expansion, and long-term value creation.

Threats: NBFCs, HFCs, mutual funds, life insurance, and health insurance companies continue to face a range of sector-specific threats. NBFCs remain challenged with asset quality pressures in specific segments such as retail unsecured and MFI. HFCs grapple with real estate volatility, regulatory tightening, and may face margin pressures due to falling interest rates. Mutual funds are vulnerable to market fluctuations, credit risk from stressed sectors, and shifting investor preferences. Life insurers face low policy persistency, investment volatility, evolving regulatory norms affecting product design and profitability and risk of increasing customer complaints from mis-selling. Health insurers contend with rising claims inflation, fraud, regulatory constraints on pricing, and underwriting complexities in the post-pandemic environment. With increasing digital adoption, cyber security risk is a key vulnerability in financial services. The expanding scale of digital financial services, cloud-based infrastructure and interconnected systems across sectors has exponentially increased the cyberattack surface.

HUMAN RESOURCES

Material developments in Human Resources, including the Companys employee strength, are covered in the Boards Report.

INTERNAL CONTROL SYSTEMS

Our Company has in place an adequate internal audit framework to monitor the efficacy of internal controls with the objective of providing the Audit Committee and the Board of Directors an independent and reasonable assurance on the adequacy and effectiveness of the organisations risk management, internal controls and governance processes. The framework is commensurate with the nature of the business and the size, scale, and complexity of its operations. The internal audit plan is developed based on the risk profile of business activities of the organisation. The audit plan covers process audits of different functions and is approved by the Audit Committee, which regularly reviews compliance.

CAUTIONARY STATEMENT

Certain statements made in this Management discussion and analysis may not be based on historical information or facts and may be forward-looking statements within the meaning of applicable securities laws and regulations, including, but not limited to, those relating to general business plans and strategy of Aditya Birla Capital Limited (ABCL or Our Company), outlook and growth prospects, competition and regulatory environment, and the managements current views and assumptions which may not remain constant due to risks and uncertainties and hence, actual results may differ materially from these forwardlooking statements. This Management discussion and analysis does not constitute a prospectus, offering circular or offering memorandum, or an offer to acquire any of our Companys equity shares or any other security, and should not be considered as a recommendation that any investor should subscribe for or purchase any of our Companys shares. Our Company, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to the fairness, accuracy, completeness or correctness of any information or opinions contained herein. Our Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements based on any subsequent developments, information or events or otherwise. Unless otherwise stated in this Management discussion and analysis, the information contained herein is based on the management information and estimates. The financial figures have been rounded off to the nearest Rupee One Crore. The events and developments up to 31st March 2025 have been covered in the Management discussion and analysis.