Aditya Birla Nuvo reports results for the quarter ended 31 December 2015

11 February 2016

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Click here to view the quarterly investor presentation

• Revenue at Rs.5,584 crore ↑ 5% (Like-to-Like)

• EBITDA at Rs.1,598 crore ↑ 18% (Like-to-Like)

• Net Profit at Rs.398 crore ↑ 24 % (Like-to-Like)

Aditya Birla Nuvo Limited (ABNL) (BSE: 500303, NSE: ABIRLANUVO, Bloomberg: ABNL IN) reported a 5 per cent like-to-like revenue growth for the third quarter ended 31 December 2015. On like-to-like basis, the company’s EBITDA rose by 18 per cent to Rs.1,598 crore largely driven by the Financial Services and the Telecom businesses. Like-to-Like net profit grew by 10 per cent to Rs.398 crore.

Highlights of the results

Aditya Birla Financial Services
Aditya Birla Financial Services (ABFS) is a large non-bank financial services player that ranks among the top five fund managers in India (excluding LIC). It has built a diversified portfolio of 12 lines of businesses. Its assets under management (AUM) soared by 26 per cent to Rs.185,515 crore. Its consolidated revenue grew by 10 per cent to Rs.2,104 crore and earnings before tax by 19 per cent to Rs.241 crore.

The lending book of Aditya Birla Finance Ltd. (ABFL), at Rs.22,210 crore, continues to grow ahead of the market, posting a year-on-year rise of 44 per cent. Its net worth expanded by 46 per cent to Rs.3,051 crore driven by capital infusion of Rs.176 crore and healthy internal accruals. ABFL has built a well diversified quality portfolio with gross NPA at 0.82 per cent and net NPA at 0.16 per cent. The Housing Finance business, which commenced its operations in October 2014, has grown its lending book sequentially by 40 per cent from Rs.880 crore in September 2015 to Rs.1,232 crore in December 2015.

Birla Sun Life Insurance ranks 5th among the private players in India with new business premium market share at 6.9 per cent for the nine months ended 31 December 2015. It remained the number #1 private life insurer in the Group segment. During the quarter, its individual new business premium grew by 7 per cent driven by agency channel. Its AUM is up by 6 per cent at Rs.30,421 crore.

The quarterly average AUM (AAUM) of Birla Sun Life Asset Management (BSLAMC) registered a 31 per cent year-on-year growth at Rs.153,974 crore. Its position as India’s 4th largest asset management company stands strengthened with a consistently rising market share of 10.19 per cent up from 9.77 per cent attained last year. Reflecting its focus on scaling up retail and high margin assets, BSLAMC’s domestic equity AAUM soared by 52 per cent to Rs.32,693 crore and offshore AAUM almost doubled to Rs.15,126 crore.

Aditya Birla Insurance Brokers enhanced its year-to-date market share from 1.44 per cent to 1.76 per cent led by a 45 per cent growth in quarterly premium placement while general insurance industry’s premium grew by 16 per cent.

MMI Holdings Ltd. has received an in-principle approval from FIPB for the proposed health insurance joint venture. Regulatory approval from IRDAI is awaited.

MyUniverse, India’s No. 1 online personal finance management portal, now enjoys the trust of more than 2.3 million registered users who are managing more than Rs.18,750 crore through this portal. It ranks as the 7th largest SIP distributor by numbers in India with 3.4 per cent market share in December 2015. MyUniverse is leveraging the platform by broadening the product offerings.

Telecom (Idea Cellular)
Idea Cellular ranks 3rd in India with an improved revenue market share of 18.5 per cent up from 17.2 per cent a year ago. Having a base of 182 million 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 is higher by 12 per cent at Rs.9,001 crore and EBITDA is up by 9 per cent at Rs.3,159 crore led by subscribers’ additions and rise in minutes of use and data volumes. To capitalise on the data opportunity, Idea is aggressively expanding its 3G and 4G footprints. On the back of strong quarterly average cash profit generation of about 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.1,387 crore is lower year-on-year by 9 per cent due to pass through of reduction in natural gas prices in the agri business on account of gas pooling policy effective from 1 June 2015. EBITDA is up by 8 per cent at Rs.190 crore. Return on Average Capital Employed during the nine months period improved year-on-year from 19 per cent per annum to 23 per cent per annum. Spurred by volume growth and improved realisation in VFY and caustic soda, EBITDA of Indian Rayon soared by 60 per cent to Rs.66 crore. Indo-Gulf Fertilisers reported a 10 per cent decline in its EBITDA at Rs.63 crore. Due to subdued demand, EBITDA of Jaya Shree textiles marginally de-grew to Rs.34 crore while EBITDA of Aditya Birla Insulators declined by 9 per cent to Rs.27 crore.

New ventures
Payments Bank: RBI has given an in-principle approval to ABNL for setting up a Payments Bank as promoter. The proposed Payments Bank will be 51:49 Joint Venture (JV) between ABNL and Idea Cellular. The JV will apply to RBI for the final grant of licence which will be subject to fulfilment of certain regulatory pre-requisites. Gearing to launch its consumer services by the second half of the calendar year 2016, the JV will capitalise on Idea’s nationwide reach of 2 million+ retail distribution channel across 383,000 towns and villages and ABNL’s experience of successfully promoting and scaling up a number of consumer centric businesses.

Solar Power: ABNL has forayed into the Solar Power business through Aditya Birla Renewables Ltd., a 51:49 JV between ABNL and the Abraaj Group, to build a large scale solar power platform in India. The joint venture brings together highly experienced management and operations teams with strong execution capabilities.

Consolidation of branded apparel businesses
The Scheme of Arrangement for the consolidation of the branded apparel businesses under Pantaloons Fashion &Retail Ltd. (PFRL) has been sanctioned by the Gujarat High Court at Ahmedabad and the Bombay High Court. On scheme becoming effective on 9 January 2016, Madura Fashion &Lifestyle business stands transferred to and vested in PFRL, which has been rechristened as Aditya Birla Fashion &Retail Ltd. (ABFRL) w.e.f. 12 January 2016. ABFRL has allotted 26 equity shares to the shareholders of ABNL for every five equity shares held by them in ABNL as on the record date 21st January 2016. The new shares so allotted by ABFRL were listed and permitted for trading on BSE and NSE with effect from 4 February 2016. With the reduction in the resultant holding of ABNL in ABFRL to 9.1 per cent, ABFRL has ceased to be the subsidiary of ABNL.

Sun Life Financial, Canada to raise its stake in Birla Sun Life Insurance (BSLI) from 26 per cent to 49 per cent
Pursuant to an agreement with ABNL, Sun Life Financial will increase its stake in BSLI from 26 per cent to 49 per cent, subject to the requisite statutory and regulatory approvals in India and Canada. ABNL will sell approximately 437 million equity shares in BSLI, constituting its 23 per cent stake, for a sum of Rs.1,664 crore, valuing BSLI at Rs.7,235 crore. On closure of the transaction, which is expected within the next 2 to 3 months, ABNL will continue to hold controlling stake in BSLI at 51 per cent.

Standalone balance sheet
Led by the realisation of subsidy in the agri business and transfer of net debt to the tune of Rs.439 crore pursuant to the de-merger of Madura into PFRL, standalone net debt has reduced from Rs.3,584 crore in March 2015 to Rs.2,980 crore in December 2015. Net debt to EBITDA stood at 3.4 times and net debt to equity at 0.34 times.

Going forward
For 2015-16, ABNL plans to invest Rs.150 crore towards the capital expenditure for its divisions. ABNL also plans to fund the growth capital requirements of the Financial Services businesses to the tune of Rs.800 crore. Out of these capital commitments, capex of Rs.88 crore and investment of Rs.392 crore has already been done during the nine months period ended 31 December 2015. Proceeds of Rs.1,664 crore from sale of 23 per cent stake in BSLI will strengthen the balance sheet.

About Aditya Birla Nuvo Limited
Aditya Birla Nuvo is a conglomerate with leadership position across its businesses. Its Financial Services business (including NBFC, Housing Finance, Life Insurance, Asset Management, General Insurance Advisory, Private Equity, Broking, Wealth Management and Online Money Management) ranks among the top five fund managers in India. Its telecom venture, Idea Cellular, ranks among the top three 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 and is foraying into the Health Insurance business. 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 `Rs.one crore. The financial results are consolidated financials unless otherwise specified.