Aditya Birla Sunlife AMC (ABSL AMC)- An Underrated AMC

Stock Opportunities Not-so-Hidden Gems
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I have already mentioned in the comment. Leading insurance companies like SBI life and HDFC life has gone through derating from a median 4-5 times embedded value to 2.5 times embedded value now.

To be specific about HDFC life, its embedded value was 15200 Cr in Mar-2018 and mkt cap was 98000 cr. i.e.,6.4XEV but now EV=47500 cr and mkt cap=130000 cr which is 2.7X but the embedded value CAGR is a whooping 25% during this span of 6 yrs. Similar pattern observed in SBI life too (trades at 2.6XEV).

ABCL’s valuation consists of insurance business which is not listed but go through this derating and hence ABCL has not outperformed in the last few years.

The reasons for this derating is discussed enough in other threads. In my opinion, the overvaluation in 2017 IPO of SBI life, HDFC life and ABCL is slowly but surely reaching nominal valuation now.

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Hej Amit, Wondering if the Holding Company Discount Logic also kick in with that perspetive

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  • Employees & Revenue: 1,552 employees; SIP flows at ₹1,171 crore; non-MF revenue rose to ₹44 crore.

  • Distributor Payouts & Investments: No cuts in distributor payouts; adding key talent in non-MF segments.

  • SIP Discontinuance: Industry-wide high SIP cancellations; Aditya added 19 lakh folios and new SIPs grew to 113,000.

  • Revenue Yields: Stable yields, with equity at 67 bps, debt at 24-25 bps, liquid funds at 12-13 bps.

  • SIP Market Share: Digital platforms drive 50-55% of SIPs; larger ticket sizes seen in traditional channels.

  • Distributor Response: Rising recognition among distributors, reflected in increased activations.

  • NFO Plans: Thematic equity, passive, target maturity, and offshore funds for NRIs.

  • Fund Performance: 60-65% of funds outperform benchmarks; none in the bottom decile.

  • Digital Growth: Customer additions rise; digital channels gaining momentum.