Aditya Birla Nuvo reports results for the quarter ended 30 September 2016

10 November 2016

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• Revenue at Rs.3,594 crore
• EBITDA at Rs.1,049 crore
• Net profit at Rs.283 crore

Aditya Birla Nuvo Limited (ABNL) (BSE: 500303, NSE: ABIRLANUVO, Bloomberg: ABNL IN) has reported a consolidated revenue of Rs.3,594 crore for the quarter ended 30 September 2016, up by 9 per cent over the previous year. EBITDA surged by 47 per cent to Rs.1,049 crore driven by Financial Services Business. Net profit at Rs.283 crore de-grew year-on-year due to the reduction of ABNL’s share in Idea’s net profit by Rs.156 crore. Net profit of Idea Cellular declined from Rs.762 crore to Rs.91 crore mainly on account of higher interest and amortisation costs pertaining to the spectrum acquired in the earlier years.

Highlights of the results:

Aditya Birla Financial Services
Aditya Birla Financial Services is one of the largest non-bank financial services players and ranks among the top 5 fund managers in India (excluding LIC). Its assets under management (AUM) rose by 20 per cent to Rs.217,840 crore. Its quarterly revenue grew by 29 per cent to Rs.2,535 crore and earnings before tax expanded by 66 per cent from Rs.210 crore to Rs.348 crore.

Aditya Birla Finance Ltd. (ABFL) ranks among the top 7 private NBFCs in India (excluding housing finance companies). Its lending book has expanded by 47 per cent to Rs.28,951 crore, ahead of the market. ABFL has c;reated a well diversified portfolio. The quality of portfolio remains sound with gross NPA at 0.74 per cent and net NPA at 0.32 per cent. It reported a healthy average Return on Equity at 15.3 per cent per annum and average Return on Asset at 2.07 per cent per annum. Led by equity infusion and strong internal accruals, its net worth has risen by 58 per cent to Rs.4,066 crore.

Aditya Birla Housing Finance Ltd., has extended its loan book from Rs.880 crore in September 2015 to Rs.2,872 crore in September 2016. On quarter-on-quarter basis, it achieved an 18 per cent growth. Its net worth has gone up to Rs.371 crore. The business has turned profitable within 18 months of full operations.

Birla Sun Life Insurance ranks 4th among private players in India with the new business premium market share at 8.5 per cent. It remained the number 1 private life insurer in the Group segment with a 27.6 per cent share. During the quarter, its individual new business premium grew by 5 per cent and the total new business premium rose by 33 per cent.

The quarterly average AUM (AAUM) of Birla Sun Life Asset Management, at Rs.183,033 crore, registered a 22 per cent year-on-year growth. Its position as India’s 4th largest asset management company stands strengthened with an improved market share of 10.49 per cent. The strong focus on scaling up retail and high margin assets continued, with its domestic equity AAUM expanding by 31 per cent to Rs.40,779 crore and PMS AAUM more than doubling to Rs.2,154 crore.

Aditya Birla Insurance Brokers enhanced its market share from 1.51 per cent to 1.75 per cent led by a 63 per cent rise in premium placement while general insurance industry’s premium rose by 40 per cent.

Having received IRDAI approval, Aditya Birla Health Insurance Co. Ltd. is targeting to launch retail products during the third quarter of financial year 2016-17.

Aditya Birla Money MyUniverse, India’s number 1 online personal finance management portal, enjoys trust of more than 2.8 million registered users who are managing over Rs.20,000 crore through this portal.

Telecom (Idea Cellular)
Idea Cellular ranks 3rd in India with an improved revenue market share of 19.3 per cent up from 18.7 per cent a year ago. Having a base of 186 million active subscribers, Idea is the 6th largest cellular operator in the world in terms of subscribers, based on operations in a single country. During the quarter, Idea’s consolidated revenue grew by 7 per cent to Rs.9,300 crore and EBITDA is marginally up at Rs.2,840 crore. To capitalise on the data opportunity, Idea is augmenting its 3G and 4G footprint. It has completed its mobile broadband footprint pan India with acquisition of 349.2 MHz of spectrum in recent auctions. On the back of strong cash profit generation, Idea is well positioned to support its growth plans.

Divisions (Jaya Shree, Indo-Gulf Fertilisers, Indian Rayon and Aditya Birla Insulators)
ABNL’s divisions are India’s leading manufacturers of linen, urea, viscose filament yarn (VFY) and insulators. Their combined quarterly revenue at Rs.1,300 crore was lower by 14 per cent year-on-year due to the pass through of reduction in natural gas prices in the Agri Business coupled with lower volumes in Textiles and Insulators Businesses. The quarterly EBITDA at Rs.188 crore was lower year-on-year by 9 per cent. Return on average Capital Employed, during the half year, remained healthy at 21 per cent per annum.

Driven by volume growth and improved realisation in Viscose Filament Yarn, Indian Rayon posted 9 per cent growth in quarterly EBITDA at Rs.70 crore. Indo-Gulf fertilizers reported a 16 per cent rise in its EBITDA at Rs.75 crore. Constrained by sluggish demand, EBITDA of Jaya Shree textiles de-grew from Rs.47 crore to Rs.27 crore while EBITDA of Aditya Birla Insulators declined from Rs.31 crore to Rs.16 crore.

New Ventures

Payments Bank: ABNL had incorporated ‘Aditya Birla Idea Payments Bank Ltd.’ in a 51:49 JV with Idea Cellular in February 2016. The senior management team is in place. The team is working on s;electing the right IT system and defining innovative products and cost efficient processes. It is planning to launch services by the first half of 2017, after obtaining the requisite approvals from RBI.

Solar Power: The business is in negotiation with lenders, technology suppliers, land owners, equipment suppliers and EPC contractors for 60 MW solar power projects, won in three talukas of Karnataka. The commissioning of the plants is targeted by June 2017.

Standalone Balance Sheet
The proceeds of Rs.1,664 crore from the sale of 23 per cent stake in Birla Sun Life Insurance and realisation of fertilisers subsidy has led to reduction in the Standalone Net Debt from Rs.3,935 crore in March 2016 to Rs.2,199 crore in September 2016. Net Debt to EBITDA stood at 2.3 times and Net Debt to Equity at 0.22 times. In October-November 2016, ABNL has further realised fertilisers subsidy of Rs.480 crore.

Going Forward
For 2016-17, ABNL has planned a capex of about Rs.325 crore for its divisions, including Rs.191 crore and Rs.40 crore towards the expansion of Linen Yarn and VFY capacities respectively. Besides, there will be a capital requirement to the tune of about Rs.900 crore in the Financial Services Businesses including new ventures - Payments Bank and Health Insurance.

Composite Scheme of Arrangement for amalgamation of ABNL with Grasim

The process of seeking requisite regulatory approvals for the Scheme of amalgamation of ABNL with Grasim and the subsequent demerger and listing of the Financial Services Business is in progress. The transaction is expected to be completed in the first half of the calendar year 2017.

About Aditya Birla Nuvo Ltd.
Aditya Birla Nuvo is a US$3.6 billion conglomerate with leadership position across its businesses. Its Financial Services Business (including NBFC, Housing Finance, Life Insurance, Asset Management, Health Insurance, General Insurance Advisory, Private Equity, Broking, Wealth Management and Online Money Management) ranks among the top 5 fund managers in India. Its Telecom venture, Idea Cellular, ranks among the top 3 cellular operators in India. It is a leading player in Linen, Agri, Rayon and Insulators Businesses. ABNL has recently ventured into the Solar Power Businesses. It has also received an in-principle approval from RBI to set up a Payments Bank in joint venture with Idea Cellular. Aditya Birla Nuvo is a part of the Aditya Birla Group, a US$41 billion Indian multinational. The Aditya Birla Group is in the league of Fortune 500. Anchored by an extraordinary force of over 120,000 employees, belonging to 42 nationalities, the Aditya Birla Group operates in 36 countries across the globe. About 50 per cent of its revenues flow from its overseas operations.

Disclaimer: Certain statements in this “Press Release” may not be based on historical information or facts and may be “forward looking statements” within the meaning of applicable securities laws and regulations, including, but not limited to, those relating to general business plans &strategy of the Company, its future outlook &growth prospects, future developments in its businesses, its competitive ®ulatory environment and management's current views &assumptions which may not remain constant due to risks and uncertainties. Actual results could differ materially from those expressed or implied. The Company assumes no responsibility to publicly amend, modify or revise any statement, on the basis of any subsequent development, information or events, or otherwise. This “Press Release” does not constitute a prospectus, offering circular or offering memorandum or an offer to acquire any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of the Company’s shares. The financial figures in this “Press Release” have been rounded off to the nearest rupees one crore. The financial results are consolidated financials unless otherwise specified.