AB Capital: a case of growing mismatch in fundamentals and price movement

Confidence on the stock remains high despite systemic concerns

The Aditya Birla Capital (AB Capital) stock has caught the fancy of many investors, explaining why it lately registered a 52-week high of Rs 114. However, the 22 per cent rally in three months finds little support from fundamentals.

The September quarter (Q2) results indicated that the pressure that non-banking finance companies (NBFCs) have been reeling under for about a year, lingers for AB Capital as well. With growth in its diversified businesses such as life insurance and asset management remaining muted, these subsidiaries too haven’t been of much help to AB Capital’s numbers.

What explains the divergence in stock