Aditya Birla Nuvo reports results for the quarter ended 31 December 2010

11th February, 2011

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Aditya Birla Nuvo Limited (ABNL), a USD 3.5 billion conglomerate with leadership position across its businesses, has reported strong financial results. For the quarter ended 31 December 2010, the company's consolidated revenue at Rs 4,563 crore grew by 12% and net profit at Rs 275 crore rose phenomenally vis-a--vis Rs 8 crore attained in corresponding quarter of the earlier year.

Rs. crore
Nine Months
11,039 17%
1,170 64%
Net profit

Led by a strong year on year earnings growth, net profit at Rs 529 crore earned in nine months surpassed full year net profit of Rs 155 crore attained in previous financial year 2009-10.

Commenting on the results, Dr. Rakesh Jain, MD, Aditya Birla Nuvo said, "The investments made in the growth businesses viz., Financial Services, Fashion & Lifestyle and IT-ITeS businesses are now yielding consistent results. This reflects the strength of ABNL's diversified business model and growth strategy which will continue to be pursued to further strengthen ABNL's leadership positions across all the businesses".

Mr. Sushil Agarwal, CFO, Aditya Birla Nuvo highlighted, "Continuing its trend of delivering strong results quarter after quarter, ABNL posted 8th consecutive quarterly growth in EBITDA. On a year on year basis, net profit recorded a swing of more than Rs 250 crore during the quarter and more than Rs 550 crore during the nine months. The balance sheet and financial ratios have also been strengthened considerably. We are committed to maintain this trend of superior performance."

Business-wise quarterly performance review:

Aditya Birla Financial Services (ABFS)

ABFS continues to strengthen its position as a large non-bank financial services player. ABFS is trusted by about 5.5 million customers and anchored by about 15,000 employees. ABFS has a nation-wide reach with more than 1,600 points of presence and about 2,00,000 channel partners. It manages combined Assets under Management (AUM) of about Rs 81,500 crore (approx. USD 18 billion). During the quarter, ABFS's revenue stood at Rs 1,460 crore, EBITDA at Rs 182 crore and net profit at Rs 151 crore.

  • Driven by strong persistency ratio, the renewal premium of Birla Sun Life Insurance (BSLI) surged by 55% to Rs 893 crore. The new business premium income at Rs 385 crore de-grew year on year. ULIP sales for majority of life insurers were impacted post the new guidelines which became effective from 1 September 2010. For BSLI, non-ULIPs contributed 38% of new business. BSLI's AUM scaled up by 30% to Rs19,165 crore. Fuelled by the growing size of in-force book, lower new business strain and better expense management, BSLI achieved EBITDA of Rs 138 crore vis-a-vis loss of Rs 128 crore in the last year. Net profit stood at Rs 127 crore during the quarter.

    No capital infusion was required during the three quarters. In the fourth quarter too, no capital infusion is estimated.

  • The total average AUM (AAUM) of Birla Sun Life Asset Management (BSAMC) stood at Rs 61,532 crore as on 31 December 2010. BSAMC's equity AAUM (incl. offshore) at Rs 15,141 crore grew by 15% during nine months. In domestic equity AAUM, BSAMC achieved the third highest growth rate among the top ten players. Its maiden Real Estate Onshore Fund collected Rs 1,088 crore. During the three quarters, EBITDA of BSAMC doubled to Rs 110 crore.
  • The average book size of Aditya Birla Finance (ABFL), the NBFC arm, surged by 90% quarter-on-quarter to around Rs 2,150 crore. ABFL disbursed loans of approximately Rs 4,700 crore towards IPO financing during the quarter.
  • Aditya Birla Private Equity launched "Sunrise Fund"aimed at investing in companies engaged in emerging sectors such as lifestyle, life skills and education, life care and applied technologies.

Telecom: The revenue of Idea Cellular rose by 26% to Rs 3,953 crore driven by a strong growth in total Minutes of Use (MoU). The total MoU on network crossed the "1 billion per day"mark during the quarter. Idea ranks third in terms of wireless revenue market share at 12.8% up from 12.1% a year ago. Idea's EBITDA grew by 13% to Rs 958 crore and net profit surged by 43% to Rs 243 crore. It absorbed the competitive pressures on average revenue per minute through cost efficiencies. Idea is targeting the 3G roll out within the next few months in 11 services areas where it has won 3G spectrum and account for 80% of its existing revenue. Idea is pursuing long-term arrangements with select quality operators for other service areas.

Fashion & Lifestyle: Madura Garments has posted a 60% growth in revenue at Rs 504 crore. The business is leveraging its brand leadership and expanded retail presence to ride on the buoyant demand in the domestic market. Like to like stores sales from the major brands (Louis Philippe, Van Heusen, Allen Solly and Peter England) grew by 35%. During the quarter, 54 Exclusive Brand Outlets (EBOs) were launched to reach a total of 506 EBOs across 9.5 lakh sq. ft. area. EBITDA shot up from Rs 10 crore to Rs 47 crore during the quarter.

During the three quarters, business posted an EBITDA of Rs 111 crore - a swing of more than Rs 100 crore over the last year.

IT-ITeS: Quarterly revenue grew year on year by 14% to Rs 428 crore. EBITDA extended by 29% to Rs 40 crore. Revenue growth, rationalised cost structure and savings in interest cost spurred profitability.

During the three quarters, Aditya Birla Minacs sold Total Contract Value of ~USD 625 million and posted a net profit of Rs 41 crore vis-a-vis a net loss of Rs 11 crore last year.

The combined revenue of the manufacturing businesses grew by 25% to Rs 1,231 crore, driven by expansion in the carbon black business and buoyant volumes in the linen segment. EBITDA stood at Rs 197 crore. In the third quarter of the previous year, the carbon black business benefited from low cost inventory while agri-business received higher subsidy arrears. While a steep rise in the input and fuel costs strained profitability in the rayon business, volume growth in the textiles business augmented profitability.

During the three quarters, manufacturing businesses posted EBITDA of Rs 575 crore, operating margin of 17% and return on average capital employed (ROACE) of 27%.

The company's standalone balance sheet stands strengthened with net debt to equity and net debt to EBITDA at 0.56 and 3.1 as on 31 December 2010 vis-a-vis 0.74 and 4.1 as on 31 March 2010. This is the outcome of consistent earnings growth, along with the promoter infusion of Rs 426 crore in December 2010, on the conversion of remaining warrants.

About Aditya Birla Nuvo Ltd.
Aditya Birla Nuvo is a USD 3.5 billion conglomerate. Over the years, it has built successful ventures into sunrise sectors viz., Financial Services (Life Insurance, Asset Management, NBFC, Private Equity, Broking, Wealth Management etc), Telecom, IT-ITeS and Fashion & Lifestyle. The razor sharp focus on manufacturing businesses has made it a leading player in Carbon Black, Agri-business, Rayon, Insulators and Textiles businesses.

To become a premium conglomerate with market leadership across businesses, delivering superior value to shareholders on a sustained basis.

Aditya Birla Nuvo is part of the Aditya Birla Group, India's first truly multinational group. The group operates in 27 countries across the globe, is anchored by an extraordinary force of over 130,000 employees belonging to 40 nationalities and derives more than 60% of its revenue from its overseas operations.

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 & regulatory 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. Important factors that could make a difference to the Company's operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the Company's principal markets, changes in Government regulations, tax regimes, competitors actions, economic developments within India and the countries within which the company conducts business and other factors such as litigation and labour negotiations. The Company assume 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.