Aditya Birla Nuvo reports results for the quarter ended 30th June 2016

11 August 2016

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Mumbai: Aditya Birla Nuvo Limited (ABNL) (BSE: 500303, NSE: ABIRLANUVO, Bloomberg: ABNL IN) has reported a consolidated revenue of Rs 3,194 crore. EBITDA surged by 34 per cent to Rs 973 crore driven by its financial services businesses. Like-to-Like net profit at Rs 305 crore de-grew year-on-year due to reduction of ABNL’s share in Idea’s net profit by Rs 148 crore. Net profit of Idea Cellular declined from Rs 855 crore to Rs 220 crore due to rise in 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 13 per cent to Rs 196,545 crore. Its revenue grew by 14 per cent to Rs 2,169 crore, Earnings before tax by 21 per cent to Rs 286 crore.

Aditya Birla Finance Ltd. (ABFL) ranks among the top 10 diversified private NBFCs in India. Its lending book has expanded by 44 per cent to Rs 26,267 crore, ahead of the market. ABFL has c;reated a well diversified portfolio. The quality of portfolio remains sound with gross NPA at 0.71 per cent and net NPA at 0.29 per cent. It reported a healthy average Return on Equity at 14.6 per cent per annum and average Return on Asset at 1.96% per annum. Led by equity infusion and strong internal accruals, its net worth expanded year-on- year by 83 per cent to Rs 3,605 crore.

Aditya Birla Housing Finance Ltd., has extended its loan book from Rs 453 crore in June 2015 to Rs 2,432 crore in June 2016 and achieved 23 per cent quarter-on-quarter growth. Net worth extended to Rs 291 crore led by capital infusion of Rs 97 Crore during the quarter.

Birla Sun Life Insurance ranks 4th among private players in India with the new business premium market share at 8.4 per cent. It remained the number 1 private life insurer in the Group segment with a 25.1 per cent share. During the quarter, its individual new business premium rose by 21 per cent driven by sound growth across the channels. BSLI has augmented its distribution strength with bancassurance tie up with the Development bank of Singapore and third party distribution tie ups with 6 corporate agents and brokers. BSLI reported its Embedded Value at  Rs 3,275 crore as on 31st March 2016 and the Value of New Business margin at 15.2 per cent for FY 2015-16.

The quarterly average AUM (AAUM) of Birla Sun Life Asset Management, at Rs 163,121 crore, registered a 15 per cent year-on-year growth. Its position as India’s 4th largest asset management company stands strengthened with an improved market share of 10.36 per cent. Strong focus on scaling up retail and high margin assets continued, with its domestic equity AAUM expanding by 26 per cent to Rs 34,969 crore and PMS AAUM more than doubling to Rs 1,493 crore.

Aditya Birla Insurance Brokers enhanced its market share from 1.92 per cent to 2.31 per cent led by a 40 per cent rise in premium placement while general insurance industry’s premium increased by 17 per cent.

Having received the FIPB approval, MMI Holdings Ltd., through its subsidiary, has infused Rs196 crore and acquired 49 per cent stake in Aditya Birla Health Insurance Co. Ltd. (ABHICL), the health insurance arm. On receiving the final approval from IRDAI to commence health insurance business in India, ABHICL has filed retail products with IRDAI. It is targeting to launch services in the second half of FY 2016-17.

Aditya Birla Money MyUniverse, India’s number 1 online personal finance management portal, enjoys trust of more than 2.7 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 18.2 per cent a year ago. Having a base of 183 million active subscribers, Idea is the 6th largest cellular operator in the world in terms of subscribers, based on operations in a single country. Idea’s consolidated revenue grew by 8 per cent to Rs 9,487 Crore and EBITDA is marginally up at Rs 3,074 crore. To capitalise on the data opportunity, Idea is aggressively expanding its 3G and 4G footprints. On the back of quarterly cash profit generation of over Rs 2,500 crore, Idea is competitively 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 revenue at Rs 1,230 crore was lower year-on-year by 17 per cent due to pass through of reduction in natural gas prices in the Agri business coupled with lower volumes in Linen segment and Insulators business. EBITDA at Rs 189 crore was lower year-on-year by 7 per cent. Return on average Capital Employed remained healthy at 22 per cent per annum.

Volume growth and improved realisation in Viscose Filament Yarn and Caustic Soda segments, enabled Indian Rayon to attain its highest ever quarterly EBITDA at Rs 74 crore, up by 22 per cent. Indo-Gulf fertilizers reported a 11 per cent decline in its EBITDA at Rs 54 crore due to subdued demand of agri inputs because of delayed monsoon. Consequent to a muted demand, the EBITDA of Jaya Shree textiles de-grew by 25 per cent to Rs 41 crore while EBITDA of Aditya Birla Insulators declined by 27 per cent to Rs 19 crore.

New Ventures
Payments Bank: Having received the in-principle approval from RBI for setting up a Payments Bank as a promoter, ABNL has incorporated ‘Aditya Birla Idea Payments Bank Ltd.’ in a 51:49 JV with Idea Cellular in February 2016. The JV is in the process of appointing senior management team, 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 calendar year 2017, after requisite approvals from RBI are in place.

Solar Power: The Power Purchase Agreement for 60 MW Solar Power Projects, won under Aditya Birla Solar Limited (ABSL) in March 2016 in the three talukas of Karnataka, has been signed in June 2016. ABSL is in the process of negotiation with technology suppliers, land owners, equipment suppliers and EPC contractors. The commissioning of the plants is targeted by the end of FY2016-17.

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 of Rs 512 crore has led to reduction in the Standalone Net Debt from Rs 3,930 crore in March 2016 to Rs 2,192 crore in June 2016. Net Debt to EBITDA stood at 2.5 times and Net Debt to Equity at 0.22 times. In July 2016, ABNL has further realised fertilisers subsidy of Rs 286 crore.

Going Forward
For 2016-17, ABNL has planned 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 750 crore in the Financial Services businesses and equity requirement of about Rs 150 crore for ABNL’s 51 per cent share in the new ventures viz., Solar Power, Payments Bank and Health Insurance.

Composite Scheme of Arrangement
The Boards of Directors of ABNL have today approved a Composite Scheme of Arrangement between the Company, its wholly owned subsidiary Aditya Birla Financial Services Ltd. (ABFSL) and Grasim Industries Ltd. (Grasim) and their respective shareholders and creditors under Sections 391-394 of the Companies Act, 1956 and applicable provisions of the Companies Act, 2013 (‘Scheme’). Aimed at creating one of the India’s largest and well-diversified companies, with a combination of cash generating and high growth businesses, the Scheme provides for merger of ABNL with Grasim and post said merger, demerger of financial services business from amalgamated Grasim into ABFSL and consequent listing of the equity shares of ABFSL. The Scheme will be subject to requisite approvals inter-alia from the shareholders, the creditors, the respective Honorable High courts and the regulatory authorities.

About Aditya Birla Nuvo Ltd.
Aditya Birla Nuvo is a USD 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 USD 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. Over 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.