Mumbai: Textiles and financial services conglomerate Aditya Birla Nuvo Ltd (ABNL) on Tuesday posted a 30.67% decline in standalone profits after tax year-on-year (y-o-y), as its revenues fell across all business segments, barring financial services.
The company’s quarterly revenue fell 15.02% to Rs1,216.76 crore while profit after tax declined to Rs65.59 crore against Rs94.61 crore in the year-ago period. “Pass through of reduction in natural gas prices in the agri business, coupled with lower volumes in the textiles and the insulators businesses,” led to lower revenue y-o-y, the company said in a statement.
ABNL’s biggest fall in revenue came from its agri-business (fertilizers, agro-chemicals, seeds) which dipped 18% to Rs565.81 crore year-on-year.
“Demonetisation led to temporary liquidity shortage in the trade channel as well as downstream players in the textiles and agri value chain,” the company added in the statement. With the cash crunch leading to lower demands, the Ebitda margins of ABNL’s various subsidies in these businesses fell.
Indian Rayon sold lower volumes and its Ebitda fell 18%, while Indo-Gulf Fertilizers and Jay Shree textiles saw a 19% and 74% decline in Ebitda, respectively.
There was a small bump in the company’s total revenue worth Rs13.60 crore from the financial services business. This segment was reviewed separately for the first time under the new India AS accounting standards, the company said in a statement. This was the only business whose revenue grew this quarter, by 77% y-o-y.
ABNL’s standalone debt fell 44% from the March 2016 quarter from the sale of the company’s 23% stake in Birla Sun Life Insurance, and the realization of a Rs115 crore subsidy in January this year. Its current standalone debt stands at Rs2,190 crore.
ABNL also announced it has received approval from the stock exchanges and the Competition Commission of India to merge the company with Grasim Industries, an Aditya Birla group company that has interests in manufacturing of viscose staple fibre, sponge iron, and chemicals. Grasim also owns the subsidiary UltraTech Cement, listed on the BSE.
The company is now waiting for permission from the National Company Law Tribunal. “The transaction is expected to be completed by the first half of fiscal 2017-18”, the company said in the statement. This merger was first announced in August last year, along with plans to de-merge and list the financial services business into a separate entity.
Shares of ABNL were trading 0.78% higher at Rs1,458.30 at 2:39pm versus the BSE’s benchmark Sensex that was 0.05% lower.