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Birla’s Nuvo returns to profit in March quarter

Birla’s Nuvo returns to profit in March quarter
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First Published: Sat, May 08 2010. 01 15 AM IST

Graphic: Paras Jain/Mint
Graphic: Paras Jain/Mint
Updated: Sat, May 08 2010. 04 16 PM IST
Mumbai: Aditya Birla Nuvo Ltd, the holding company for the financial services, telecom, information technology, manufacturing and garments business of the Aditya Birla Group, rebounded to a profit in the quarter ended March.
Graphic: Paras Jain/Mint
The company posted net profit of Rs180 crore in the three months, against a Rs146 crore loss in the corresponding period last year.
Revenues from financial services, which includes asset management, non-banking finance company, broking and private equity businesses, more than doubled to Rs124 crore from Rs58 crore last year.
Nuvo earned Rs338.8 crore from garments, a 24% rise from last year, while the manufacturing business earned Rs1,020 crore versus Rs963 crore in 2009.
Managing director Rakesh Jain said the company will spend Rs320 crore in capital expenditure in fiscal 2011, mainly to expand capacity in manufacturing. It will also infuse Rs200 crore into its loss making life insurance unit, along with its foreign partner Canada based Sun Life Financial Inc. Nuvo will add Rs148 crore in the company in line with its 74% stake.
Chief financial officer Sushil Agarwal said the company will also increase its carbon black capacity by 85,000 tonnes to 4 million tonnes. Carbon black is primarily used to coat car tyres and engines, besides photocopier and printer cartridges, paints, crayons and polishes.
The company is also in the process of demerging its financial services business, valued at Rs6,000 crore, into a new non-banking finance company, tentatively called Aditya Birla Financial Services. It includes the Rs881 crore private equity business.
Aditya Birla Nuvo’s stock on Friday rose 1.73% to close at Rs769 each, despite a 1.29% drop in the Bombay Stock Exchange’s 30-share Sensex index to close at 16,769.11.
joel.r@livemint.com
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First Published: Sat, May 08 2010. 01 15 AM IST