Aditya Birla Nuvo consolidated Q4 net flat

Aditya Birla Nuvo part of diversified Aditya Birla group  today reported a marginal dip in its consolidated post-tax profit for the March quarter at Rs 199 crore from Rs 200.2 crore a year ago, due to the poor  performance by some of its verticals.

Aditya Birla Nuvo has group’s financial services, telecom, apparels, IT and IT enabled services (ITes) and manufacturing arm under it.   

Rakesh Jain, managing director, AB Nuvo, attributed the fall in the bottomline to the headwinds from its manufacturing vertical, specifically in the carbon black and agricultural businesses.

"The carbon black business has a direct correlation with auto, which has suffered due to the ongoing economic conditions. The agricultural business faced difficulties because of non-release of subsidies on urea by government," he told reporters while announcing the results.

The carbon black division's profit before tax came down to Rs 19.68 crore from Rs 33.86 crore a year ago, while the profit for the agriculture business was Rs 17.89 crore from Rs 24.20 crore.

Jain said company is yet to receive about Rs 1,400 crore from government for the urea subsidies but added that this is an industry wide phenomenon and that it will be paid by the end of the first quarter of the current fiscal.

Among its other businesses, financial services excluding life insurance, telecom (which includes the listed GSM operator Idea Cellular) and its information technology services vertical reported an increase in their respective pre-tax profit.

Total debt came down to around Rs 3,650 crore from Rs 4,400 crore in the preceding quarter ended December, while the debt to equity ratio also reduced to 3.3 per cent from the high of 4.5 per cent.

Its chief financial officer Sushil Agarwal said “this was possible because of the infusion of Rs 832 crore equity of a total commitment of Rs 1,500 crore by the promoters during the quarter” adding the company expects to get balance amount in next two quarters.  

He further the remainder of the infusion of around Rs 670 crore will be done by September.

Even though the company, formed to incubate newer businesses, continues to look at acquisition targets at regular basis, it will not go for a big ticket acquisition now and would instead concentrate on integration of the newly acquired clothing retail business Pantaloon, Jain said.

The chief executive of its financial services arm Ajay Srinivasan said it continues being interested in applying for a banking license and added that an external consultant has also been appointed to chart a roadmap.

The company is waiting for clarifications from the Reserve Bank at present, he said, adding even if the clarifications do not come through, it will adhere by the July 1 deadline to apply.

The company board today recommended a 65 per cent dividend for the fiscal, up from the 60 per cent in the previous fiscal.