Shares of Aditya Birla Sun Life AMC climbed up to 4.75% to achieve a 52-week high of Rs 1,098.90 per share, driven by optimistic assessments from brokerages and fourth-quarter financial performance.
Investment firm Motilal Oswal maintained its buy recommendation on the stock, setting a target price of Rs 1,230, derived from 36 times the projected core price-to-earnings ratio for fiscal year 2028.
In the fourth quarter, Aditya Birla Sun Life AMC reported operating revenue of approximately Rs 4.6 billion, up 7% from the previous year but down 4% from the prior quarter, meeting expectations.
Management fee yields for the period were 42.1 basis points, compared to 44.9 basis points in the fourth quarter of fiscal 2025 and 43.1 basis points in the third quarter of fiscal 2026. For the full fiscal 2026, revenue increased 10% year-over-year to Rs 18.5 billion.
Total operating expenses rose 4% annually to Rs 1.9 billion, in line with forecasts, resulting in a cost-to-income ratio of 41.9% for the fourth quarter of fiscal 2026, versus 43.1% in the same period of fiscal 2025. Earnings before interest, taxes, depreciation, and amortization grew 9% year-over-year but fell 8% quarter-over-quarter to Rs 2.7 billion, missing estimates by 5%, with a margin of 58.1% compared to 56.9% in the prior year’s fourth quarter and an estimate of 59.5%.
Profit after tax was Rs 1.9 billion, down 18% year-over-year and 31% quarter-over-quarter. The 9% shortfall in profit after tax stemmed primarily from negative other income, while core profit after tax reached Rs 2.2 billion, up 23% annually.
For fiscal 2026, profit after tax increased 5% year-over-year to Rs 9.8 billion. Company leaders indicated that regulatory adjustments starting in April 2026 might reduce equity yields by about 3-4 basis points initially.
However, they anticipate mitigating most of this through adjustments to commission frameworks and efficiency measures, keeping the net effect on earnings to roughly 1-2 basis points or less.
The brokerage stated it is largely maintaining its earnings projections for fiscal years 2027 and 2028, factoring in reduced asset under management growth. This slower expansion is likely to pressure revenue, though steady expenses may provide some counterbalance.
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