Solid Holding Company for 3x returns

Often there are market anomalies which lasts quite longer due to multiple reasons , we saw it recently in ITC and other FMCG stocks which go re rated after very long consolidation. Today we have picked up yet another strong holding company in the financial services industry.

Aditya Birla Capital Limited (ABCL) is the holding company for the financial services businesses of the Aditya Birla Group. It has a number of business under its umbrella and many of them will be listed in near future unlocking its value.

SubsidiarySegment
Aditya Birla sun life  insurance Life Insurance
Aditya Birla Health InsuranceGeneral Insurance
Aditya Birla Wellness private limitedWellness rewards program
Aditya Birla sun life AMCMutual fund management – under IPO now
Aditya Birla Money ltdFinancial Services , Brokerage
Aditya Birla Finance ltdNBFC
Aditya Birla housing financeHousing Finance NBFC

** The stock has seen superb consolidation between 110 and 140 levels and is slowly moving towards being a multi bagger. The shareholding pattern suggests close to 13% retail participation which indicates that the stock hasn’t been sold aggressively and have been brought by serious investors for a long run. One of its key companies has opened the doors for going public and is currently under its IPO process ( Aditya Birla Sunlife AMC ) .

** With an AUM of ₹2.94 trillion, Aditya Birla Sun Life AMC is India’s fourth largest fund house .The fund house’s ₹2,700-crore IPO will open on 29 Sep at a price band of ₹695-712 per share

** Finally its the sum of parts discount theory , if you compare the business of similar pedigree companies the valuation should demand at par prices with its peer but the stock is trading at 2x discount to its peers both in terms of forward looking EPS and consolidated book value.

Technically stock is seeing good volumes and a progressive accumulation leading to a stable price movement. This stock can be bought on every down fall of over 2%.

Stock Name : Aditya Birla Capital

Recommended price 115 , short term 3 months target 147 , long term 18 – 24 months target 330.

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