Aditya Birla Capital

Asset quality stable, but loan book declines 6%

Aug 09, 2020 05:08 IST capital market

Adyta Birla Capital has reported 26% decline in the net profit to Rs 198.38 core in the quarter ended June 2020 compared with Rs 269.85 core in the corresponding quarter last year mainly driven by two -fold increase in credit cost. The overall loan book of the company has declined, while the asset quality was stable in Q1FY2021. The company has created an additional Rs 62 Crore as COVID provisions in its lending businesses in Q1 FY21.

The income from operation increased 11% to Rs 4034.55 core in Q1FY2021. The revenue from Life Insurance increased 38% to Rs 1929.62 crore and Housing Finance 4% to Rs 322.21 crore, while the revenue from Health Insurance moved up 52% to Rs 221.53 crore and Other Financial Services 165% to Rs 32.09 crore. However, the revenue from NBFC declined 13% to Rs 1393.85 crore, Asset Management 18% to Rs 258.54 crore, General Insurance Broking 23% to Rs 104.39 crore and Stock & Securities Broking 2% to Rs 44.34 crore in Q1FY2021.

The PBT from NBFC declined 53% to Rs 188.89 crore and Asset Management 26% to Rs 130.12 crore, while the PBT from Housing Finance also fell 8% to Rs 35.53 crore and Stock & Securities Broking 2% to Rs 5.02 crore in Q1FY2021. The PBT from Life Insurance increased 16% to Rs 28.91 crore and General Insurance Broking 19% to Rs 28.57 crore. The Other Financial Services segment recorded PBT of to Rs 6.42 crore, while the Health Insurance segment recorded pre-tax losses of to Rs 58.38 crore in Q1FY2021.

Performance for Q1FY2021

Overall OPM eased to 32.67% in Q1FY2021 from 43.07% in Q1FY2020, as other expenditure as a percentage of net sales moved up to 57.42% from 48.46%, while the provisions increased to 5.38% from 2.96% in Q1FY2020.

Interest cost declined 9% to Rs 1064.76 crore. PBT dipped 35% to Rs 284.65 crore in the quarter ended June 2020. The effective tax rate declined to 34.3% from 41.4%. There was profit attributable to non-controlling interest of Rs 11.45 crore in Q3FY2020. Net Profit, fell 26% to Rs 198.38 crore in the quarter ended June 2020.

Book value of the company stood at Rs 52.9 per share, while adjusted book value (net of Net Stage 3 assets) stood at 48.3 per share end June 2020.

Segment wise performance

Lending

Overall lending book (NBFC and Housing Finance) stood at Rs 58073 crore, recording decline of 6% yoy.

Maintained Core operating profit in NBFC and Housing Finance despite slow recovery under lockdown.

Lending book is backed by well-matched asset and liability mix with adequate liquidity.

Raised over Rs 1500 crore of long-term funds during the quarter.

Continue to have strong focus on quality of book with reduced ticket sizes across the board

NBFC business

Loan book at Rs 45939 crore; restarted lending with caution during the quarter with gradual ramp up of activity, currently 100% branches operational.

Maintained Core operating profit with pre provision operating profit at Rs 392 crore, during the quarter.

Additional COVID related provisions of Rs 50 crore in Q1 FY21.

Cost to income ratio reduced by 223 bps from 33.5% in Q4 FY20 to 31.3% in Q1 FY21.

The Net profit after tax stood at Rs 140 crore vis-?-vis Rs 137 crore in previous quarter

Housing Finance business

Loan book at Rs 12134 crore, with 96% retail.

Net interest margins expanded by 29 bps to 3.27% over previous year.

Maintained core operating profit with pre provision operating profit at Rs 52 crore.

Additional COVID related provisions of Rs 12 crore in Q1 FY21.

Strong drive towards technology deployment to drive sales and customer engagement with 85% of sourcing digital in July 2020.

The Net profit after tax for the quarter stood at Rs 28 crore vis-?-vis Rs 21 crore in Q4 FY20 and Rs 27 crore in Q1 FY20.

Asset Management

Overall closing assets under management grew by 8% to Rs 217643 crore from March 20 to June 20.

Closing equity AUM grew by 19% to Rs 78,017 crore from March 20 to June 20.

Keeping its continued focus on building retail customer franchise, the retail AAUM grew by 12% over the last quarter; while the SIP AUM increased by 27%, quarter on quarter.

Maintained profitability with Profit before tax/AAUM at 24 bps against 22 bps in Q4 FY20.

Digital transactions account for 94% of overall transactions as compared to 81% in previous quarter

Insurance:

Total gross premium of life insurance and health insurance grew 38% year on year to Rs 1,936 crore.

Life Insurance business

Individual First Year Premium (FYP) grew 5% year on year to Rs 309 crore, significantly ahead of industry year on year degrowth of 23%.

Consistent improvement in quality with 13th month persistency by 200 bps, year on year, to 81%, from 79%.

Strong focus on digital with 96% individual business sourced digitally o Maintained gross margin at 33.1% despite falling interest rate scenario.

Sharp reduction in Opex to premium ratio, year on year, from 23.1% to 16.3%

Health Insurance business

Gross written premium at Rs 246 crore; grew 72% over the previous year, ahead of industry growth of 16% for Stand Alone Health Insurers, with Retail business contributing 73%.

Covering 8.9 million lives out of which over 5 million lives covered through micro and byte size products.

Business continues to build scale with significant improvement in combined ratio at 132% vs. 146% in the previous year.

Robust digital enablement with 98% digital issuance in Q1 FY21 vs. 93% in FY20 and digital renewals at 92% vs. 65% in previous year.

Other businesses

Profit before tax grew 64% year on year to Rs 41 crore from Rs 25 crore.

General Insurance broking profit before tax grew 20% year on year to Rs 29 crore driven by technology adoption.

ARC platform continues to scale up with AUM at Rs 2,500+ crore

Financial Performance FY2020

For the year ended March 2020 (FY2020), the consolidated net revenue of the company increased 11% to Rs 16792.29 crore. The revenue in NBFC segment moved up 11% to Rs 6201.74 core, life insurance revenues 5% to Rs 7791.52 crore and housing finance 27% to Rs 1298.39 crore. Further, the revenues from general insurance broking increased 15% to Rs 514.63 crore and health insurance 61% to Rs 802.66 crore. However, asset management revenues declined 12% to Rs 1234.56 crore and stock and securities broking revenues were flat at Rs 170.72 crore in FY2020 over FY2019.

Overall OPM eased to 34.1% in FY2020 from 35.09% in FY2019, as the provisions as a percentage of net sales increased to 4.6% from 1.5% in FY2019. However, the other expenditure eased to 56.9% from 58.3%. The staff cost as a percentage of net sales has declined to 4.3% from 5.2% in FY2019. However,

With 12% rise interest cost at Rs 4607.01 crore and sharp 77% rise in depreciation to Rs 102.56 core and one off expense of Rs 9.99 crore, PBT declined 7% to Rs 1279.74 crore in FY2020. The effective tax rate declined to 32.07% in FY2020 from 41.24% in FY2019. Net Profit after non-controlling interest moved up 6% yoy to Rs 919.78 crore in FY2020.

Aditya Birla Capital: Consolidated Results?

 

Particulars 2006 (3) 1906 (3) Var % 2003 (12) 1903 (12) Var %
Income from Operations 4034.55 3645.75 11 16792.29 15163.51 11
OPM (%) 32.67 43.07 34.12 35.04
OP 1318.05 1570.30 -16 5730.26 5313.30 8
Other Income 57.47 66.04 -13 269.04 234.30 15
PBDIT 1375.52 1636.34 -16 5999.30 5547.60 8
Interest (Net) 1064.76 1174.61 -9 4607.01 4109.06 12
PBDT 310.76 461.73 -33 1392.29 1438.54 -3
Depreciation / Amortization 26.11 24.59 6 102.56 57.89 77
PBT before EO 284.65 437.14 -35 1289.73 1380.65 -7
EO 0.00 0.00 - 9.99 0.00 -
PBT after EO 284.65 437.14 -35 1279.74 1380.65 -7
Tax Expenses 97.72 181.04 -46 413.63 569.35 -27
PAT 186.93 256.10 -27 866.11 811.30 7
Profit attributable to non-controlling interest -11.45 -13.75 -17 -53.67 -59.64 -10
Net Profit after minority and share in associate 198.38 269.85 -26 919.78 870.94 6
EPS * 3.3 4.5 3.9 3.6
* Annualized on current equity of Rs 2413.86 core excluding EO and relevant tax. 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 2006 (3) 1906 (3) (%) of Total Var (%) 2003 (12) 1903 (12) (%) of Total Var (%)
Segment Revenue
NBFC 1393.85 1596.23 32 -13 6201.74 5607.27 34 11
Housing Finance 322.21 309.71 7 4 1298.39 1025.05 7 27
Life Insurance 1929.62 1394.34 45 38 7791.52 7411.68 43 5
Asset Management 258.54 315.63 6 -18 1234.56 1407.18 7 -12
General Insurance Broking 104.39 135.23 2 -23 514.63 448.64 3 15
Stock & Securities Broking 44.34 45.39 1 -2 170.72 171.52 1 0
Health Insurance 221.53 145.94 5 52 802.66 499.81 4 61
Other Financial Services 32.09 12.12 1 165 62.96 26.86 0 134
Total Segmental Revenue 4306.57 3954.59 100 9 18077.18 16598.01 100 9
Less: Inter Segment Revenue -13.90 -11.76 18 -49.51 -27.64 79
Total Segment Revenue from Operations (Net) 4292.67 3942.83 100 9 18027.67 16570.37 9
Segment Results (Profit Before Tax)
NBFC 188.89 400.67 52 -53 1052.91 1328.01 62 -21
Housing Finance 35.53 38.83 10 -8 136.19 106.94 8 27
Life Insurance 28.91 24.87 8 16 137.47 131.46 8 5
Asset Management 130.12 175.37 36 -26 660.73 646.76 39 2
General Insurance Broking 28.57 23.91 8 19 42.10 27.35 2 54
Stock & Securities Broking 5.02 5.14 1 -2 16.50 14.00 1 18
Health Insurance -58.38 -65.03 -16 -10 -245.51 -256.89 -15 -4
Other Financial Services 6.42 -51.46 2 -112 -113.20 -200.71 -7 -44
Total Segment Results 365.08 552.30 100 -34 1687.19 1796.92 100 -6
Capital employed
NBFC 7811.65 7544.52 53 4 7696.64 7289.47 53 6
Housing Finance 1377.34 1186.09 9 16 1347.97 1165.56 9 16
Life Insurance 2745.63 2521.37 18 9 2657.39 2448.82 18 9
Asset Management 1409.45 1334.36 9 6 1304.07 1215.39 9 7
General Insurance Broking 35.54 41.98 0 -15 3.83 22.94 0 -83
Stock & Securities Broking 213.61 211.77 1 1 207.32 209.29 1 -1
Health Insurance 343.18 215.62 2 59 312.25 192.70 2 62
Other Financial Services 682.64 -1416.45 5 -148 695.77 -1337.15 5 -152
Total Segment 14619.04 11632.02 98 26 14225.24 11207.02 98 27
Inter-Segment Elimination 0.00 0.00 0 - 0.00 0.00 0 -
Add: Unallocated Corporate 259.09 53.14 2 388 325.27 73.32 2 344
Total 14878.13 11685.16 100 27 14550.51 11280.34 100 29
Figures in Rs crore, PL: Profit to Loss; LP Loss to Profit
Source: Capitaline Corporate Database

Powered by Capital Market - Live News

Related Story