Aditya Birla Group's Grasim Industries' results for the quarter and year ended 31st March, 2018 have been impressive, with all-round growth both at the Standalone and Consolidated level.
For the full year FY17-18, Standalone revenue at INR 15,788Cr. was up by 53% compared to last year. Standalone EBITDA grew by 35% at INR 3,542 Cr.
At consolidated level, the revenue for FY17-18 rose by 56% to INR 56,162 Cr. and EBITDA atINR 10,879 Cr. was up by 31%
The results of the current period are not comparable with that of the previous year, as the previous year’s results do not include the results of the erstwhile Aditya Birla Nuvo Limited (ABNL), which was merged with the Company with effect from 1st July, 2017. However, on like to like basis, the performance for the quarter and year ended 31st March, 2018 was impressive. Standalone revenue for the quarter was up by 26% (full year up by 30%) and EBITDA grew by 35% (full year up by 14%).
The Board of Directors of Grasim has recommended a higher dividend of INR 6.20per share as against INR 5.50 per share (adjusted for sub-division of share) in the previous year. The total outflow on account of the dividend would be INR 455 crore (inclusive of the corporate tax on dividend).
The Net Revenue for Q4FY18at INR 2,232 Cr. is up by 15% and EBITDA at INR 401 Cr. by 16%. For FY18, the Net Revenue at INR 8,376 Cr. is higher by 18% and EBITDA by 17% at INR 1,680 Cr driven by higher sales volume and improved average realisations with higher domestic sales.
The VSF business reported its highest ever sales volume of 508KT in FY18, led by growth in the domestic market with intense market development efforts. The share of the domestic sales the overall sales rose to 75% in FY18 from 69% in FY17. The number of LIVA tagged garments has witnessed a 10-fold increase in the last 3 years to 30.25 million in FY18. More than 3000 stores across the country are making LIVA tagged garments available to the customers.
The capacity debottlenecking at multiple plant locations is progressing well, with 44KTPA of capacity coming on-stream in May-2018. The recently announced brownfield capacity expansion plan at Vilayat is under implementation. Project related work has commenced from April-2018.
The caustic soda prices stabilised during the quarter led by capacity restarts in China. The underlying demand from the user industry (Alumina and Textile) continues to remain buoyant.
Net Revenue for the quarter rose by 35% YoY to INR 1,439 Cr. and EBITDA by 95% YoY to INR 412 Cr. driven by better realization and higher sales volume. For FY18 the Net Revenue is extended by 31% to INR 5,004 Cr. and EBITDA by 31% to INR 1,300 Cr. The management focus on increasing the volume of chlorine based value added products continues. The Caustic Soda brownfield expansion of 144 KTPA at Vilayat, Gujarat was commissioned in May-18.
The Board has evaluated plans for brownfield capacity expansion of Caustic Soda along with new Chlorine VAPs at multiple plant locations and has approved in principle an investment of around `1,000 Cr.
Cement Subsidiary – UltraTech
UltraTech reported an increase in Consolidated Sales, higher by 34% (YoY) to INR 9,298 Cr. and EBITDA augmented by 20% to INR 1,887 Cr. in Q4FY18.
During Q4FY18 and FY18 the consolidated sales volume registered an increase of 15% and 20% on YoY basis. The input costs continued to rise in Q4FY18, due to higher pet coke and coal prices and the ban on pet coke usage in TPP.
The consolidated sales and EBITDA for FY18 stood at INR 30,973 Cr. and INR 6,729 Cr. vis-a-vis to INR 25,092 Cr. and INR 5,861 Cr. in FY17.
Financial Services Subsidiary – Aditya Birla Capital Limited (ABCL)
ABCL was listed on the stock exchanges on 1st September, 2017 as the culmination of the composite scheme of arrangement. Aditya Birla Nuvo Ltd. merged with the Company and the financial services undertaking was subsequently demerged into ABCL.
ABCL reported a robust financial performance in Q4FY18 with a Consolidated Revenue of INR 4,203 Cr. and EBT of INR 398 Cr. as per IGAAP. The lending book (Incl. housing) grew 32% YoY to INR 51,378 Cr. in Q4FY18.
The Asset Management business (Ranked No.3 Mutual Fund in India) reported a 27% YoY increase in Average Assets under management to INR 2,67,739 Cr. The business reported an overall domestic market share of 10.75% and equity market share of 9.2% in Q4FY18.
Life Insurance business saw a 12.4% growth in the Indian Embedded Value to INR 4,281 Cr as (31-Mar-2018) from INR 3,810 Cr (31-Mar-2017). The Net value of new business (VNB) margin turned positive at 4.3% in FY18 vis-à-vis negative 5.5% in FY17. ABCL is touching the lives of 10 million active customers.
The VSF business will continue to focus on expanding the market in India by partnering with the textile value chain, achieving better customer connect through brand Liva and enriching the product mix through a larger share of specialty fibre. However, the new capacities likely to come on stream in China may impact the global VSF prices in the near term.
The demand for Caustic Soda in India is expected to grow with rising consumption from the Alumina and Textile sectors. In Cement, Government spending on infrastructure, rural and affordable housing will be the key demand drivers. The Company is well positioned across the country to cater to this growth in demand.
In Financial Services, ABCL is geared to provide Universal Financial Solutions to meet the customers’ money needs for life. ABCL’s focused customer-centric approach under a single brand, namely Aditya Birla Capital will enable it to chart a differentiated, accelerated and disciplined path to growth.