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Aditya Birla Nuvo net profit up 50% on strong revenue growth

aditya-birla-nuvoQUAAditya Birla Nuvo, the diversified business company, reported a 10% increase in its first-quarter revenue to Rs 6,820 crore, while net profit rose 50% to Rs 397 crore.

EBITDA rose 31% to Rs 1,671 crore.

Financial Services

Aditya Birla Financial Services (ABFS) assets under management (AUM) grew by 29% to USD 28.9 billion (Rs 173,170 Crore). Its consolidated revenue at Rs 2,022 Crore registered a 22% rise and earnings before tax is up by 18% at Rs 260 Crore.

The lending book of Aditya Birla Finance has expanded by 44% to Rs 18,175 Crore, ahead of the market growth. Its loan book continues to be well diversified and healthy with Gross NPA at 0.84% and net NPA at 0.22%. Led by equity infusion and strong internal accruals, its net worth stands expanded by 47% at Rs 2,679 Crore. The Housing Finance business, which commenced operations in October 2014, has reported lending book at Rs 450 Crore as on 30th June 2015.

Birla Sun Life Insurance (BSLI) improved its private sector ranking from 5th to 4th in India with new business premium market share at 8.6%. It maintained its numero uno position in the group segment. Its AUM rose by 13% to Rs 30,385 Crore. BSLI reported its Embedded Value at Rs 3,260 Crore (as on 31st March 2015) and the Value of New Business margin at 14.1% for 2014-15.

The quarterly average AUM (AAUM) of Birla Sun Life Asset Management rose by 33% to Rs 141,664 Crore. It ranks as the 4th largest asset management company in India with an improved market share of 10.22% up from 9.98% attained in the previous year. Its equity AAUM nearly doubled to Rs 27,704 Crore and Offshore AAUM more than doubled to Rs 14,280 Crore.

The premium placement of Aditya Birla Insurance Brokers rose by 24%, twice the industry growth rate, leading to a gain in the market share. MyUniverse, India’s No. 1 online personal finance management platform continues to grow. It enjoys the trust of 1.8 million registered users and is helping customers manage Rs 16,800 Crore as on date. It ranks among the top 20 SIP distributors in India. ABFS signed a joint venture agreement with MMI Holdings Ltd. in June 2015 to foray into the Health Insurance and Wellness business in India. An application has been made to the regulator for obtaining the license.

Fashion & Lifestyle (Madura and Pantaloons)

ABNL’s Fashion & Lifestyle business saw revenue rise by 14% to Rs 1,321 Crore and EBITDA by 37% to Rs 79 Crore despite lower customer footfalls and higher discounting witness across the industry.

Driven by retail stores expansion and growth in the wholesale channel sales, Madura’s revenue extended by 12% to Rs 884 Crore and EDITDA by 10% to Rs 68 Crore. It launched 24 stores (net) during the quarter to reach 1,759 Stores.

The revenue of Pantaloons Fashion & Retail Ltd. (PFRL) is up by 14% at Rs 439 Crore backed by stores expansion and like-to-like growth of 4.2%. It posted an EBITDA of Rs 4 Crore against a loss of Rs 4 Crore reported last year. As a result of its continued focus on enriching product portfolio, the revenue share of its exclusive brands has increased from 52% to 55%.

ABNL’s Fashion & Lifestyle business is the largest branded menswear and womenswear player in India, with over 10.8 million loyalty customers. It’s wide fashion retail presence stands increased to 1893 Stores spanning 4.8 million square feet.

Telecom (Idea Cellular)

Idea’s consolidated revenue jumped by 16% to Rs 8,795 Crore and EBITDA is up by 32% at Rs 3,351 Crore, on the back of rise in minutes of use and data volumes. Led by the post tax cash profit generation of Rs 2,553 Crore during the quarter, standalone Net Debt to EBIDTA remained comfortable at 1.49 times.

Divisions

ABNL’s divisions are India’s leading manufacturers of linen, urea, viscose filament yarn (VFY) and insulators. Combined together, their revenue at Rs 1,434 Crore was up by 16% and EBITDA at Rs 196 Crore surged by 41%.

Driven by a 19% growth in urea volumes, improved energy efficiency and higher share of value added Neem coated urea, EBITDA of Indo-Gulf has more than doubled to Rs 59 Crore. In the first quarter of the previous year, urea volumes were impacted on account of a 15 days plant breakdown and shutdown.

EBITDA of Indian Rayon grew by 10% to Rs 60 Crore spurred by growth in VFY volumes and a higher share of superfine yarn. Aditya Birla Insulators saw its EBITDA augmenting from Rs 8 Crore to Rs 26 Crore largely because of a 64% rise in volumes and improved yield. In the first quarter of the previous year, operations in the Rishra Plant were disrupted or suspended for 42 days due to labour unrest.

Balance Sheet

The realisation of subsidy in the Agri business and operating cash flows resulted in reduction of Net Debt from Rs 3,584 Crore in March 2015 to Rs 3,202 Crore in June 2015. The standalone balance sheet remains healthy with Net debt to EBITDA at 3.1 times and Net Debt to Equity at 0.37.


Outlook

For 2015-16, ABNL has earmarked a capital expenditure plan of about Rs 300 Crore. The Company also plans to fund the growth capital requirements of the Financial Services business to the tune of Rs 600 Crore. ABNL has recently forayed in the Solar Power business which will also require equity funding to bid for upcoming projects.

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