Aditya Birla Nuvo has posted satisfactory performance for the 2nd quarter ended 30th September 2007
Continued growth in consolidated revenues
The Company’s consolidated revenues at Rs. 3,000.5 Crores are up by 43% from Rs. 2,092.1 Crores achieved during the corresponding quarter of FY 2007. Revenues from its subsidiaries and joint ventures, where the company has made substantial investments in the past, saw a rise of 74% to Rs. 2082.8 Crores from Rs. 1,195.6 Crores. The focus during the quarter was :
1) accelerating growth in the telecom business,
2) regaining market share in the life insurance business,
3) building capacities in the BPO business towards profitable growth and
4) expanding manufacturing capacities in value businesses.
All the businesses are on a growth trajectory.
-- The Telecom business registered a 55% rise in revenues at Rs. 1562.2 Crores vis-à-vis Rs. 1009.9 Crores with a subscriber base of 18.67 Mn as on September 30, 2007, growing at a higher clip than the industry.
-- The Life Insurance business has shown a spectacular growth of 110% in revenues at Rs. 1078.2 Crores vis-à-vis Rs. 512.9 Crores driven by the excellent response to its new product “Birla Sunlife Gold plus”. As a result, it stepped up to 5th rank with 6.5% market share amongst private players.
-- In the BPO business, revenues soared by 82% to Rs. 393.7 Crores from Rs. 216 Crores. Three new centres were launched during the quarter.
The Stand-alone revenues rose to Rs. 917.7 Crores from Rs. 896.5 Crores despite the plant breakdown in fertilisers business for 27 days. Two of the value businesses viz., Rayon and Insulators achieved the highest ever quarterly revenues. In the Insulators business, revenues more than doubled after the merger of the manufacturing subsidiary with Nuvo w.e.f. April 1, 2007.
Investment phase of growth businesses had gestating impact on profitability Consolidated net profit at Rs. 47.8 Crores is lower by 38% against Rs. 76.7 Crores attained in the corresponding quarter of the preceding year largely on account of the gestating nature of its major businesses viz., Life Insurance and BPO. That said, in revenues, both Life Insurance and BPO businesses have registered impressive growth. The other businesses viz., Telecom, Carbon Black and Insulators have put in an impressive performance growing in revenues and earnings.
-- The Telecom business has reported net profit at Rs. 220.3 Crores vis-à-vis Rs. 106.9 Crores earned in the corresponding quarter of the last year. The growth in profitability is despite gestating phase of three new circles launched in later half of previous year.
-- The Life insurance business incurred higher losses of Rs. 83.9 Crores during the quarter due to increasing share of new business premium and higher spend on expanding its distribution reach to regain the market share.
-- In the BPO business, the bottom line has also been impacted by the interest cost on funding of the acquisition of Minacs, the weakening of US Dollar and one time cost of Rs. 11.5 Crores besides ramping up and training costs for new business.
The standalone net profit during the quarter was higher at Rs. 54.9 Crores against Rs 53.7 Crores attained in corresponding quarter of last year. Insulators and Carbon Black businesses posted record operating profits during the quarter.
Growth Initiatives
-- Birla Sun Life Insurance’s emphasis is on regaining its market share, expanding branch network, strengthening its agency force and launching contemporary products.
-- Birla Sunlife Asset Management Company has aggressive plans to open new branches and launch innovative products.
-- Telecom will strengthen and expand its network in existing circles and better its reach through roll out in Mumbai and Bihar circles. Plans for pan India presence are underway.
-- BPO business is scaling its global delivery capacity with focus on migration to high margin KPO segment and low cost locations.
-- Madura Garment will aggressively pursue apparel retailing with the launch of large format stores for Peter England and Mens Lifestyle stores for Fashion brands.
-- Carbon Black business is accelerating green-field expansion by 1,20,000 MT in Western India.
-- Insulators business is expanding its capacity by 8,000 MT besides foraying in polymer insulators
-- Textiles business will increase its capacity in linen fabrics and flax yarns.
-- Fertilisers business will focus on de-bottlenecking to increase capacity.
In most of our businesses, we are going ahead with our investment plans to leverage growth opportunities. Aditya Birla Nuvo is very optimistic about meeting the challenges of strategic growth initiatives and enhancing its revenues and earnings, but for some more time, given the investments in growth phase, the Life Insurance and BPO businesses will create a stretch on profitability.
No comments:
Post a Comment