Mumbai, Nov 2: Aditya Birla Nuvo, which reported a two-fold jump in its consolidated net profit at Rs 214.25 crore for the September quarter, has announced a capex plan of Rs 650 crore over the next two years. “We had Rs 100 crore capex during the first half of the fiscal on various businesses. Over the next 18 to 24 months, we will be spending Rs 650 crore on various ventures. This also includes Rs 150 crore to add new stores,” whole-time director and chief financial officer Sushil Agarwal told reporters here while announcing the earnings.
Stating that the proposed investment will be for routine work, Managing Director Rakesh Jain said, “in the agri business we have been waiting for government policy for expansion. But if the policy guidelines are out soon then our capex could go up significantly. That is almost a billion dollar type investment. We are looking for that in the next few years.”
The Kumar Mangalam Birla-led group's holding company had a net profit of Rs 104.79 crore in the year-ago period. “Our life insurance business did very well during the reporting period. There has been a positive improvement in telecom business too with a rise in revenue. We have also crossed 100 million subscriber base, increasing our profitability. Fashion and Lifestyle business has also added to the profitability,” Agarwal said.
Its net revenues increased to Rs 5,285.90 crore in the second quarter, from Rs 4,495.23 crore in the year-ago period. “We have posted strong earnings even amidst challenges of prevailing macroeconomic environment that affected a few of our business. This only reflects the strength of our conglomerate model,” Jain said.
In the fashion and lifestyle segment, the company posted a 24 percent year-on-year surge in revenue at Rs 594 crore, while the same rose 19 percent to Rs 481 crore in the IT and ITes sector and the income from the manufacturing segment expanded by 25 percent to Rs 1,469 crore. However, on a standalone basis, Aditya Birla Nuvo's net profit fell to Rs 91.94 crore in the quarter under review from the Rs 119.58 crore in the year-ago period. Standalone net sales grew to Rs 2,006.79 crore from the Rs 1,606.37 crore in the corresponding quarter of the preceding year.
The group's financial services arm—Aditya Birla Financial Services—saw a four percent rise in revenue. The company is upbeat on its non-banking financial service business and plans to grow the Rs 2,700 crore order book on the infrastructure side.
It is keen to apply for a banking license after the final guidelines on the same are issued.
“As a part of our vision for financial business, we aspire to have a banking license and it will all depend on how the final guidelines will come. As of now, based on the present guidelines we believe we should be one of the top contenders to aim for the banking license,” Agarwal said.
The Reserve Bank in August had issued the draft guidelines on new bank licences, pegging the minimum required capital for the holding company at Rs 500 crore, and limits the foreign shareholding at 49 percent. At present, the minimum capital requirement for the banking sector is Rs 300 crore and the foreign shareholding in private sector banks is allowed up to 74 percent of the paid-up capital.
Cheering the smart quarterly numbers, the stock rallied 4.48 percent to Rs 947.20 a piece on the BSE, on a day when the main index Sensex fell 224 points.
