Aditya Birla Capital

NBFC business slows but other businesses boost overall growth

Nov 08, 2019 05:11 IST capital market

Aditya Birla Capital has reported 37% surge in the net profit to Rs 255.78 crore in the quarter ended September 2019 compared with Rs 186.07 crore in the corresponding quarter last year with improved operating margins, lower tax rate and stable performance across all business segments.

The income from operation increased 11% to Rs 3975.94 crore in Q2FY2020. The revenue from NBFC segment increased 16% to Rs 1558.16 crore, while the revenue from Health Insurance moved up 45% to Rs 148.54 crore and Housing Finance 34% to Rs 325.07 crore in Q2FY2020. The revenue from General Insurance Broking also increased 7% to Rs 116.37 crore and Life Insurance 2% to Rs 1791.30 crore. However, the revenue from Asset Management declined 17% to Rs 322.75 crore and Stock & Securities Broking 9% to Rs 40.07 crore in Q2FY2020.

The PBT from NBFC was flat at Rs 317.07 crore, while the PBT from Asset Management moved up 13% to Rs 175.35 crore and Housing Finance 70% to Rs 35.55 crore in Q2FY2020. The PBT from General Insurance Broking increased 35% to Rs 11.36 crore and Stock & Securities Broking 17% to Rs 4.07 crore. The Health Insurance segment recorded lower pre-tax losses of to Rs 69.87 crore in Q2FY2020. However, the Life Insurance PBT rebounded to Rs 41.43 crore and other financial services to Rs 43.48 crore in Q2FY2020 from losses in Q2FY2019.

Performance for the quarter ended September 2019

Overall OPM improved to 37.3% in Q2FY2020 from 34.3% in Q2FY2019, as other expenditure as a percentage of net sales eased to 51.9% from 56.2%. The staff cost as a percentage of net sales also declined to 4.7% from 5.7% in Q2FY2019. However, the provisions increased to 3.8% from 1.4% in Q2FY2019.

Interest cost increased 18% to Rs 1166.92 crore. PBT moved up 31% to Rs 371.82 crore in the quarter ended September 2019. The effective tax rate declined to 347% from 46.0%. There was profit attributable to non-controlling interest of Rs 12.85 crore in Q2FY2020. Net Profit, increased 37% to Rs 255.78 crore in the quarter ended September 2019.

Book value of the company stood at Rs 48.3 per share, while adjusted book value (net of Net Stage 3 assets) stood at 45.4 per share end September 2019.

Company wise performance

Lending

Overall lending book (NBFC and Housing Finance) grew 4% yoy to Rs 60477 crore vs Rs 57945 crore in the previous year.

NBFC and HFC have an optimized asset and liability mix with adequate liquidity to meet growth requirements. The company raised approximately Rs 8000 crore of long-term funds during the half year.

The company has further diversified borrowing profile with sanction of US$ 275 million (drawn USD 100 million) through ECB route.

The company continues to have strong focus on quality with greater diligence in underwriting and reduced ticket sizes across the board.

NBFC business

Loan book grew at slow pace of 2% yoy to Rs 48368 crore with SME and Retail segment showing better growth of 14%.

Net Interest Margin expanded by 63 bps year on year to 5.28%

Quarterly profit after tax grew 6% year on year to Rs 218 crore; adjusting for a one time impact of deferred tax, Quarterly profit after tax grew by 32% year on year to Rs 273 crore

Housing Finance business

Loan book grew 22% year on year to Rs 12079 crore while maintaining Net Interest Margin at 3.0%

Cost to Income Ratio improved to 45%, as compared to 70% in previous year led by scale and operating efficiencies

Quarterly profit before tax grew 2.1 times year on year to Rs 28 crore

Insurance

Total gross premium of life insurance and health insurance grew to Rs 1716 crore

Life Insurance business

Individual First Year Premium (FYP) grew 20% year on year during the half year, higher than industry (excl. LIC) growth at 11%

Consistent improvement in quality across periods with 13th month persistency improving by 610 bps year on year to 80.2%

Embedded Value (EV) at Rs. 5031 as on 30th September 2019 with EV growing by 14.4%

Continue to focus on balanced channel and product mix for value creation

Health Insurance business

Gross written premium at Rs 315 crore, grew 78% over the previous year with retail business contributing 67%.

Covering more than 5 million lives out of which 2.4 million lives through micro products.

Business continues to build scale with significant improvement in combined ratio during half year at 155% vs. 180% in the previous year.

One of the largest third party distribution capacities with 10 banca partners.

Asset Management

Total average assets under management (AAUM) at our Mutual Fund was Rs 269393 crore.

Domestic equity AAUM mix steady at 35%.

Quarterly profit after tax grew 40% year on year to Rs 148 crore.

Keeping its focus on expanding retail presence, investor folios have grown 1.5 times over last 2 years to reach 7.1 million folios.

Aditya Birla Capital has a diversified portfolio of businesses catering to the life time needs of its customers. This diversification also allows the conglomerate to capture opportunities in different segments of the market and deliver consistent growth.

Financial Performance H1FY2020

For the half year ended September 2019 (H1FY2020), the consolidated net revenue of the company increased 15% to Rs 7621.69 crore. The revenue in NBFC segment moved up 21% to Rs 3173.13 crore, life insurance revenues 3% to Rs 3185.64 crore and housing finance 38% to Rs 634.78 crore. Further, the revenues from general insurance broking increased 11% to Rs 251.60 crore and health insurance 65% to Rs 294.48 crore. However, asset management revenues declined 15% to Rs 638.38 crore and stock and securities broking revenues fell 2% to Rs 85.46 crore in H1FY2020 over H1FY2019.

With 23% rise interest cost at Rs 2341.53 crore and depreciation at Rs 49.02 crore, PBT increased 31% to Rs 808.96 crore in H1FY2020. The effective tax rate declined to 38.3% in H1FY2020 from 43.6% in H1FY2019. Net Profit after non-controlling interest moved up 32% yoy to Rs 525.63 crore in H1FY2020.

Aditya Birla Capital: Consolidated Results

 

Particulars 1909 (3) 1809 (3) Var % 1909 (6) 1809 (6) Var % 1903 (12) 1803 (12) Var %
Income from Operations 3975.94 3590.86 11 7621.69 6653.97 15 15163.51 11523.88 32
OPM (%) 37.3 34.3 40.1 36.5 35.0 34.6
OP 1482.80 1232.43 20 3053.10 2431.81 26 5313.30 3984.79 33
Other Income 80.37 57.62 39 146.41 110.35 33 234.30 178.97 31
PBDIT 1563.17 1290.05 21 3199.51 2542.16 26 5547.60 4163.76 33
Interest (Net) 1166.92 992.09 18 2341.53 1897.24 23 4109.06 3023.65 36
PBDT 396.25 297.96 33 857.98 644.92 33 1438.54 1140.11 26
Depreciation / Amortization 24.43 14.09 73 49.02 27.77 77 57.89 44.27 31
PBT 371.82 283.87 31 808.96 617.15 31 1380.65 1095.84 26
Tax Expenses 128.89 130.72 -1 309.93 269.02 15 569.35 402.76 41
PAT 242.93 153.15 59 499.03 348.13 43 811.30 693.08 17
Profit attributable to non-controlling interest -12.85 -32.92 -61 -26.60 -50.61 -47 -59.64 0.02 LP
Net Profit after minority and share in associate 255.78 186.07 37 525.63 398.74 32 870.94 693.06 26
EPS * 4.4 3.2 4.5 3.4 3.8 3.0
* Annualized on current equity of Rs 2312.56 crore. Face Value: Rs 10, Figures in Rs crore
PL: Profit to Loss, LP: Loss to Profit
Source: Capitaline Corporate Database

Aditya Birla Capital: Segment Results

 

Particulars 1909 (3) 1809 (3) (%) of Total Var (%) 1909 (6) 1809 (6) (%) of Total Var (%) 1903 (12) 1803 (12) (%) of Total Var (%)
Segment Revenue
NBFC 1558.16 1346.06 36 16 3173.13 2617.86 38 21 5607.27 4436.39 34 26
Housing Finance 325.07 241.74 8 34 634.78 460.86 8 38 1025.05 590.22 6 74
Life Insurance 1791.3 1748.02 42 2 3185.64 3080.94 38 3 7411.68 5793.76 45 28
Asset Management 322.75 387.2 7 -17 638.38 748.95 8 -15 1407.18 1323.51 8 6
General Insurance Broking 116.37 108.58 3 7 251.6 225.87 3 11 448.64 264.93 3 69
Stock & Securities Broking 40.07 44.04 1 -9 85.46 87.07 1 -2 171.52 164.57 1 4
Health Insurance 148.54 102.2 3 45 294.48 178.76 4 65 499.81 248.33 3 101
Other Financial Services 10.12 6.56 0 54 22.24 16.19 0 37 26.86 74.59 0 -64
Total Segmental Revenue 4312.38 3984.4 100 8 8285.71 7416.5 100 12 16598.01 12896.3 100 29
Less: Inter Segment Revenue -13.52 -6.46 109 -25.28 -14.38 76 -27.64 -55.23 -50
Total Segment Revenue from Operations (Net) 4298.86 3977.94 8 8260.43 7402.12 12 16570.37 12841.07 29
Segment Results (Profit Before Tax)
NBFC 317.07 316.97 67 0 717.74 652.18 70 10 1328.01 1050.89 74 26
Housing Finance 35.55 20.87 8 70 74.38 34.27 7 117 106.94 34.11 6 214
Life Insurance 41.43 -2.02 9 LP 66.3 20.04 6 231 131.46 130.41 7 1
Asset Management 175.35 155.26 37 13 350.72 301.02 34 17 646.76 523.12 36 24
General Insurance Broking 11.36 8.39 2 35 35.27 23.43 3 51 27.35 39.15 2 -30
Stock & Securities Broking 4.07 3.49 1 17 9.21 6.06 1 52 14.00 10.10 1 39
Health Insurance -69.87 -72.64 -15 -4 -134.9 -137.39 -13 -2 -256.89 -197.05 -14 30
Other Financial Services 43.48 -45.77 9 LP -94.94 88.40 -9 PL -200.71 -153.05 -11 31
Total Segment Results 471.48 384.55 100 23 1023.78 811.21 100 26 1796.92 1437.68 100 25
Capital employed
NBFC 7706.66 6825.9 65 13 7706.66 6825.9 64 13 7289.47 6172.36 65 18
Housing Finance 1213.93 1116.23 10 9 1213.93 1116.23 10 9 1165.56 747.50 10 56
Life Insurance 2569.4 2268.25 22 13 2569.4 2268.25 21 13 2448.82 2329.35 22 5
Asset Management 1263.25 1178.91 11 7 1263.25 1178.91 11 7 1215.39 1160.95 11 5
General Insurance Broking 17.48 33.42 0 -48 17.48 33.42 0 -48 22.94 52.91 0 -57
Stock & Securities Broking 213.91 204.55 2 5 213.91 204.55 2 5 209.29 201.11 2 4
Health Insurance 293.22 204.38 2 43 293.22 204.38 2 43 192.69 115.15 2 67
Other Financial Services -1455.21 -1209.9 -12 20 -1455.21 -1209.9 -12 20 -1337.15 -556.76 -12 140
Total Segment 11822.64 10621.74 100 11 11822.64 10621.74 99 11 11207.01 10222.57 99 10
Inter-Segment Elimination 0 0 0 - 0 0 0 - 0 0 0 -
Add: Unallocated Corporate 159.01 -0.42 0 - 159.01 -0.42 1 - 73.32 -64.03 1 -
Total 11981.65 10621.32 100 13 11981.65 10621.32 100 13 11280.33 10158.54 100 11
Figures in Rs crore
Source: Capitaline Corporate Database

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