Aditya Birla Nuvo reports good results for the year ended 31 March 2016

20 May 2016

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Click here to view the quarterly investor presentation

• Revenue at 23,129 crore ↑ 11% (Like-to-Like)

• EBITDA at Rs.6,535 crore ↑ 24% (Like-to-Like)

• Net Profit at Rs.1,886 crore ↑ 30 % (Like-to-Like)

Aditya Birla Nuvo Limited (ABNL) (BSE: 500303, NSE: ABIRLANUVO, Bloomberg: ABNL IN) reported a 11 per cent like-to-like revenue growth for the year ended 31 March 2016. On a like-to-like basis, the company’s EBITDA rose by 24 per cent to Rs.6,535 crore largely driven by NBFC, Asset Management, Telecom, Rayon and Agri businesses. Net profit surged to Rs.1,886 crore.

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 five fund managers in India (excluding LIC). It has built a diversified portfolio of 12 lines of businesses. Its assets under management (AUM) rose by 12 per cent to Rs.184,276 crore as on 31 March 2016. Its revenue grew by 17 per cent to Rs.9,299 crore and earnings before tax by 17 per cent to Rs.995 crore.

The lending book of Aditya Birla Finance Limited (ABFL), at Rs.25,755 crore, continues to grow ahead of the market, posting a year-on-year rise of 47 per cent. Its net worth expanded by 43 per cent to Rs.3,696 crore driven by capital infusion of Rs.702 crore and healthy internal accruals. ABFL has built a well diversified quality portfolio with gross NPA at 0.63 per cent and net NPA at 0.22 per cent. It has posted strong earnings growth with a 37 per cent rise in revenue at Rs.2,442 crore and 51 per cent jump in net profit at Rs.409 crore. Return on average equity enhanced year-on-year from 14.6 per cent to 15.4 per cent per annum.

Aditya Birla Housing Finance Limited, which commenced its operations in October 2014, has extended its loan book from Rs.142 crore in March 2015 to Rs.1,973 crore in March 2016 and achieved 60 per cent quarter-on-quarter growth. Net worth rose to Rs.205 crore led by capital infusion of Rs.189 crore during the year.

Birla Sun Life Insurance ranks 4th among private players in India with new business premium market share at 7.6 per cent for the year ended 31 March 2016. It remained number 1 private life insurer in the Group segment with 25.6 per cent share. On like-to-like basis, its individual new business premium is up by 5 per cent driven by 10 per cent growth in the agency channel. Its AUM stands at Rs.30,811 crore and net profit at Rs.140 crore.

The quarterly average AUM (AAUM) of Birla Sun Life Asset Management (BSLAMC) is up year-on-year by 14 per cent at Rs.152,427 crore. Its position as India’s 4th largest asset management company stands strengthened with a consistently rising market share at 10.1 per cent. Reflecting its focus on scaling up retail and high margin assets, BSLAMC’s domestic equity AAUM soared by 23 per cent to Rs.31,891 crore, offshore AAUM by 14 per cent to Rs.13,718 crore and PMS AAUM by 67 per cent to Rs.1,205 crore. Its revenue surged by 28 per cent to Rs.765 crore and net profit by 64 per cent to Rs.203 crore.

Aditya Birla Insurance Brokers enhanced its market share from 1.33 per cent to 1.68 per cent led by a 43 per cent rise in annual premium placement while general insurance industry’s premium increased by 14 per cent. The proposed Health Insurance joint venture (JV) with MMI Holdings Limited has received an in-principle approval from FIPB and is awaiting final approval from IRDAI. The launch of its services is planned during the second half of FY2016-17, subject to regulatory approvals.

MyUniverse, India’s number 1 online personal finance management portal, now enjoys the trust of more than 2.6 million registered users who are managing close to Rs.20,000 crore through this portal. MyUniverse is ready to become a multi-product transaction platform with analytics based integrated cross-sell capability.

Telecom (Idea Cellular)
Idea Cellular ranks 3rd in India with an improved revenue market share of 18.9 per cent up from 17.5 per cent a year ago. Having a base of 184 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 is higher by 14 per cent at Rs.35,935 crore and EBITDA is up by 18 per cent at Rs.13,257 crore driven 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, leveraging its strong spectrum bank. On the back of annual cash profit generation of over Rs.10,000 crore, Idea is competitively well positioned to support its growth plans.

Divisions (Jaya Shree, Indo-Gulf Fertilisers, Indian Rayon and Aditya Birla Insulators)
The combined revenue of divisions at Rs.5,466 crore was marginally up year-on-year 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 surged by 24 per cent to Rs.764 crore mainly driven by the Rayon and the Agri businesses. Return on average capital employed improved year-on-year from 16 per cent to 21 per cent per annum.

Spurred by volume growth and improved realisation in Viscose Filament Yarn and Caustic Soda segments, Indian Rayon attained its highest ever earnings. Its EBITDA soared by 35 per cent to Rs.266 crore. Indo-Gulf fertilizers posted its highest ever production and sales volume. It reported a 41 per cent rise in its EBITDA at Rs.209 crore led by higher neem coated urea volumes and increased contribution from production beyond 100 per cent capacity due to lower natural gas prices. EBITDA of Aditya Birla Insulators augmented by 19 per cent to Rs.114 crore driven by higher volumes and realisation.

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 Limited’ 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 end of FY2016-17, after requisite approvals from RBI are in place.

Solar Power: ABNL had entered into a 51:49 JV with the Abraaj Group to build a large scale solar power platform in India. ABNL has won a total of 60 MW solar power projects in three talukas of Karnataka in March 2016. The signing of Power Purchase Agreement is expected during the first quarter and the commissioning of the solar power plants is targeted in the fourth quarter of FY2016-17.

Sun Life Financial, Canada raises 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 has bought 23 per cent stake in BSLI from ABNL for Rs.1,664 crore in April 2016, valuing BSLI at Rs.7,235 crore. ABNL continues to hold the controlling stake in BSLI at 51 per cent. The sale proceeds were utilised to reduce the debt of ABNL in April 2016.

Dividend
The Board of Directors has recommended an equity dividend of 50 per cent (Rs.5 per equity share) for the financial year 2015-16 entailing a total outgo of Rs.75.5 crore including dividend distribution tax.

Standalone Balance Sheet
In FY2015-16, ABNL incurred a capex of Rs.110 crore for divisions and infused capital of Rs.967 crore in the Financial Services business. The standalone net debt increased from Rs.3,584 crore in March 2015 to Rs.3,786 crore in March 2016. Net debt to EBITDA stood at 4.5 times and net debt to equity at 0.44 times. During April 2016, ABNL received Rs.1,664 crore from the sale of 23 per cent stake in BSLI and also realised fertilisers subsidy of Rs.489 crore. Adjusting for these, net debt to EBITDA stands comfortable.

Going forward
For 2016-17, ABNL plans to incur a capital expenditure 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 for ABNL’s 51 per cent share in the new ventures viz., Solar Power, Payments Bank and Health Insurance.

ABNL’s standalone balance sheet stands strong enough to fund its growth plans, factoring in the proceeds from stake sale in life insurance business coupled with the steady free cash flow generation from divisions and ABNL’s ability to pool cash resources.

About Aditya Birla Nuvo Limited
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, 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.

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