Seven brokerage and investment firms give 'buy' call for Aditya Birla Capital since it reported healthy earnings in fiscal year

As many as seven brokerage houses and investment firms have given a "buy" call for Aditya Birla Capital shares as the financial services provider recently reported a healthy earnings in Q4 and for the entire fiscal.

They are Motilal Oswal, Credit Suisse, HDFC Securities, ICICI Securities, Investes, and Morgan Stanley, and their target price falls in the range of Rs 130 to Rs 169.

ICICI Securities pegged the highest at Rs 169, whereas Credit Suisse the lowest at Rs 130. It posted a rise of 20 per cent in its consolidated profit after tax at Rs 450 crore Q4, whereas the consolidated revenue rose 18 per cent year on year to Rs 6,962 crore.

For the entire financial year FY22, the consolidated revenue rose 16 per cent to Rs 23,633 crore, whereas profit after tax rose 51 per cent to Rs 1,706 crore, which is reportedly the highest ever recorded by the company.

"With the worst on asset quality behind it, the coming years will see an uptick in its growth and margin profile, lower credit costs, and better return ratios," Motilal Oswal said, adding that the asset management business is likely to churn out better profitability, driven by an improvement in revenue as well as cost rationalization.

Further, brokerage house ICICI Securities believes that franchise investment, cross-sell or up-sell and leveraging digital and analytics will likely help the company boost its RoE (return on equity) profile.

Looking at the FY22 performance, Investec opined that the company has mitigated Covid-19 impact and is well positioned to deliver strong earnings growth over next three years.