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Aditya Birla Capital Ltd.

BSE: 540691 Sector: Financials
NSE: ABCAPITAL ISIN Code: INE674K01013
BSE 11:01 | 27 Sep 108.55 0.90
(0.84%)
OPEN

107.00

HIGH

109.45

LOW

107.00

NSE 10:24 | 27 Sep 107.55 -0.10
(-0.09%)
OPEN

107.65

HIGH

109.50

LOW

107.20

OPEN 107.00
PREVIOUS CLOSE 107.65
VOLUME 65869
52-Week high 139.10
52-Week low 85.70
P/E 82.23
Mkt Cap.(Rs cr) 26,233
Buy Price 108.35
Buy Qty 72.00
Sell Price 108.50
Sell Qty 268.00
OPEN 107.00
CLOSE 107.65
VOLUME 65869
52-Week high 139.10
52-Week low 85.70
P/E 82.23
Mkt Cap.(Rs cr) 26,233
Buy Price 108.35
Buy Qty 72.00
Sell Price 108.50
Sell Qty 268.00

Aditya Birla Capital Ltd. (ABCAPITAL) - Chairman Speech

Company chairman speech

Dear Shareholders

For many years we have been talking about increasing volatility andunpredictability. The events of the last 24 months have heralded a new era of uncertaintywhere both the amplitude and frequency of shiƒs have vastly exceeded anything we haveseen in recent decades. The unprecedented pandemic was followed by supply chain whiplashand further disruption was brought on by the Russia-Ukraine war. We are now staring at thespectre of a high- interest rate and high-inflation regime globally. Over the yearscorporations have tried to find a balance between efficiency and resilience withsuccessive decades of growth having swung the pendulum in the direction of efficiency. Theevents of the last two years have again taught us all the virtues of reserves andresilience.

This era of disruption also presents a unique opportunity for renewal.The exigencies of this disruption have pushed the boundaries of innovation. A world wheretraditional rules didn?t apply freed thinking from its conventional shackles. And weare clearly staring at a new age with new paradigms and new ideas.

GLOBAL ECONOMY: THE STORM BEFORE THE CALM?

The global economy recovered from the pandemic shock in 2022 on theback of supportive fiscal and moneta? policies and mass vaccination programmes. Howeverat the end of FY 2021-22 the war in Ukraine and the subsequent economic sanctions onRussia posed a large shock. It disrupted energy markets and supply chains and added to thealready evolving inflationa? pressures and concerns over consumer demand. Consequentlygrowth forecasts have been slashed. The International Moneta? Fund (IMF) now expects theworld economy to grow by 3.6% in CY22 which is 0.8 percentage points lower than itspre-war projections.

Many economies have experienced a sharp surge in inflation recentlyparticularly in food and fuel prices taking their inflation rates to multi-decade highs.Central banks have been forced to respond to surging prices with aggressive rate hikes.The pace of moneta? tightening is turning out to be quite swiƒ as central bankersattempt to catch up with the rising inflation from their ultra-accommodative stance duringthe pandemic. As the stance of moneta? policy shiƒs there is greater turbulence incurrency markets. The dollar has strengthened while emerging economies have witnesseddownward pressure on their currencies. At the same time energy and commodity markets havewitnessed heightened volatility. Global supply chain disruptions due to pandemic-inducedlockdowns have been replaced by new disruptions caused by the war in Ukraine and theeconomic sanctions. While the global economic backdrop remains challenging there arereasons to remain optimistic. First despite the slowdown IMF?s projection of worldGDP growth in CY22 is still tracking the pre-pandemic average. Second fiscal support indeveloped economies remains above the pre-pandemic trend even if somewhat diluted versuspast years. Third mega-trends around sustainability green investments digitisation anddisintermediation remain well-entrenched and will support growth and productivityenhancement in the medium-term.

Thus while businesses will need to remain on guard regarding financialmarket volatility and cost pressures this year one could expect the medium-term growthrecove? to remain on track.

INDIA: AN ENGINE OF GLOBAL GROWTH

The Indian economy has not remained unscathed by these globaldevelopments. Partly on account of the elevated commodity prices in global marketsIndia?s inflation has pushed higher than the target of the Reserve Bank of India(RBI). To control inflationa? risks and reduce the pressure on the rupee RBI has beenselling reserves and unwinding the extraordina? liquidity support provided by it duringthe pandemic. On the positive side economic activity in India has witnessed a sharprecove? to pre-pandemic levels on the back of a rapid and widespread rollout of thevaccination programme. A strong digital ecosystem fiscal and moneta? policy and variousgovernment schemes helped small and medium enterprises and the worst affected sections ofthe population to survive while reviving demand and bringing the economy back on track.Even as the global headwinds are being felt India?s growth recove? is progressingwell and most estimates peg economic growth during FY 2022-23 around the 7% range. Indiatherefore is poised to be the fastest-growing major economy in the world and an engine ofglobal growth.

India?s exports are exhibiting a strong buoyancy and economicsentiment has been supported by a robust pipeline of infrastructure projects as well asthe government?s pragmatic policies such as the production-linked incentivesschemes. Many industries have witnessed fresh project investment announcements. Foreigndirect investment flows have remained strong. The burden of non-performing assets in thebanking sector seems to have peaked out and is easing. Dynamism in India?s digitalecosystem diversification of global supply chains away from China and the greateremphasis of investors on sustainable finance offer new opportunities for India.

The above trends lend confidence to a robust economic narrative forIndia in the medium-term which augurs well for the corporate sector as well.

ADITYA BIRLA GROUP: DYNAMISM AND RESILIENCE AT PLAY

The Aditya Birla Group?s pace of activity range of businessesand depth of global presence provide a useful compass to navigate this age of disruption.Against the backdrop of our long histo? as a group dynamism leaps out as a common theme.Over the years we have witnessed multiple business cycles. Across businesses and marketsour evolution is a sto? of continuous renewal and regeneration as we aggressivelyinvested in growth and created long-term value for all stakeholders. This institutionaldynamism and resilience helped us navigate an unprecedented business environment in FY2021-22.

The pandemic inordinately impacted the future of work workforce andworkplace. We have moved with the new work ethic by focusing on a holistic employeeexperience that puts equal emphasis on growth engagement and well-being. Our employeesvalue and appreciate the One ABG culture which is profoundly embedded across theorganisation. This culture gives the ultimate competitive edge in a world where businessmodels are easily upended.

It has been a matter of great pride for us that our employee engagementhas continued to be strong despite the stresses of the pandemic. 87% of our employeesstated in a survey that they have a colleague/friend at work to lean on during difficulttimes. 96% of our employees experienced considerate behaviour from their managers duringthis period.

WE ARE ONLY AS STRONG AS OUR PEOPLE

The Group?s continued focus and investment in its people processesin good times have helped us build and sustain a robust and agile workforce that is ableto be nimble and responsive at all times.

When corporates across the world are facing a rather unusual phenomenon– The Great Resignation our employee survey score for intent to stay remainedstrong. It is higher than the Global High Performing organisations and almost similar topre-COVID levels. This strong affinity is a testimony to our relentless commitment todelivering a world of opportunities with care to our employees.

Internal employee movements of over 5000 (within the businesses) wereup 18% from the average of the last two fiscals. We also focussed on bringing in youngtalent with 73% of new hires being under 35 years of age. Last year over 9000 newemployees joined the Group refreshing our competence base. Building an aspirationalworkplace for a diverse workforce was identified as one of the important aspects of ournew HR strategy. Enhancing the diversity of our Group is a journey and it is gettingstrengthened with targeted efforts over time. Our commitment to gender diversity isevident through the appointment of 7 women to senior leadership roles. 21% of all newhires were women and we had 102 women engineering graduates join us at plant locations.We have always looked for opportunities to showcase the power of our women leadership.This year our cement business UltraTech launched India?s first‘all-women? operated Ready-Mix Concrete (RMC) manufacturing plant at BhugaonPune. Our list of firsts includes Aditya Birla AMC?s all-women mutual fund branch inBhilai Chhattisgarh and Aditya Birla Fashion and Retail?s Madura manufacturingplants in the south zone which has 85% women employees. Our learning strategy evolvedcontinually to adapt in response to the dynamic external environment. This was achieved byre-designing innovative learning properties and methodologies focusing on buildingcontempora? and contextual skills. We shiƒed gears across digital blended and nowhybrid learning making it easier to shiƒ across modes of learning for different setsof learners. We strategically increased the adoption and penetration of our digitallearning platform (Gyanodaya Virtual Campus) to cover 94% of our employees in themanagement cadre. Leveraging the power of internal and external networks 500+high-quality digital content modules were created on various themes and topics across ABG.The spirit of ABG?s resilience and dynamism was displayed at an individual team andbusiness level. This has been reflected in the business results for FY 2021-22. This yearalso saw the launch of new businesses units capacity products and brands. Thishappened seamlessly presenting a unique human sto? of innovation and grit and bringingalive our Group values of commitment and passion. We have together navigated anunprecedented period of disruption and emerged stronger and sharper— demonstratingthat care empathy and results are mutually compatible. And especially so in periods ofturmoil.

YOUR COMPANY?S PERFORMANCE

Your Company has built a platform with high quality significant scaleand a retail franchise over the years. Your Company has tripled net profit over the lastfive years and nearly doubled over the previous two years despite several externalchallenges. The integrated and diversified model backed by motivated teams has helped todeliver consistent growth in profitability across economic cycles. The record results thisfiscal stand testament to that.

Your Company is now poised to capitalise on its strong franchise andfuture opportunities in the financial services space. The retailisation strategy has ledto the active customer base growing to ~ 35 Million a 36% year-on-year growth. The scaleachieved by the Company?s subsidiaries is evident with overall AUM across assetmanagement life insurance and health insurance businesses growing 10% year-on-year toRs.370608 Crore making it one of the largest fund managers in the count?. The overalllending book (NBFC and Housing Finance) grew 11% year-on-year to Rs.67185 Crore makingit a lending portfolio of scale. The gross premium (across Life and Health Insurance) grew25% year-on-year to Rs.13867 Crore reflecting the scale in the insurance businesses.Today Aditya Birla Capital is ranked among India?s top 100 listed companies in termsof consolidated profitability. Your Company?s revenue grew 16% year-on-year toRs.23633 Crore. The consolidated profit aƒer tax (aƒer minority interest)reflected a growth of 51% year-on-year to Rs.1706 Crore the highest ever recorded by theCompany. The reported consolidated PAT includes a net gain of Rs.161 Crore from the saleof ~1% stake of the Company?s 51% stake in ABSLAMC through its IPO in October 2021.The unique model and strong focus on the value drivers in each business has led to thedelive? of key metrics well ahead of our FY 2023-24 guidance.

Your Company has also been able to leverage its digital capabilities toseamlessly integrate with ecosystem partner journeys to acquire customers at scale. AdityaBirla Capital has been a leader in adopting new technologies in the BFSI space andreplicating them quickly across its lines of business. This would include use cases acrosscustomer onboarding service and retention journeys. To leverage the power of One ABCdeveloped a number of digital assets to provide a seamless and differentiated experiencefor its customers. Many of these assets are unique in the Indian banking and financialservices space.

The FY22 performance reflects the strong execution by teams across eachbusiness of your Company and a relentless focus on generating value for our stakeholders.The strength of the platform and the huge opportunity in financial services give usconfidence that the business is poised to continue to grow strongly in the future.

The financial services sector is pivotal to the India growth sto? aswell as the Group?s overall strategy. Your Company has a vision to be a leader androle model in the financial services sector and has made significant progress towards it.Going forward your Company will focus on maximising the value of its active customerbase while continuing to drive customer acquisition at scale through partnerships. Itwill also focus on leveraging technology and analytics to grow revenue per customerimprove customer experience optimise costs and build robust and scalable systems.

CONCLUSION

The forces of change engulfing the world are creating a whole new setof exciting possibilities and unbelievable opportunities. Many that didn?t even existyesterday. We are uniquely privileged we are not passive recipients of changingcircumstances but can actively shape our destiny. And this tomorrow is for us to discoverand build.

Across businesses we are at the cusp of a transformational growthcycle. As a business house we have always made investment decisions based on long-termfundamental drivers like market opportunity demography technology etc. Our strongleadership position across key businesses has come on the back of bold but calibratedlong-term bets. Given the inherent strengths of your Company we are again at a momentwhere we are uniquely positioned to invest for long-term growth and explore new paradigms.An exciting journey beckons.

Regards

KUMAR MANGALAM BIRLA

Chairman Aditya Birla Group

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