Aditya Birla Reports Q3

MUMBAI, India -- Aditya Birla Nuvo has posted satisfactory results for the 3rd quarter ended 31st December 2006.

Strategic Highlights

The Company has invested Rs. 1373 crores in IDEA and Rs. 150 crores in BPO business in the current fiscal. To fund these, the company has borrowed funds, which has impacted net profit.

The funds raised through rights issue will be used to neutralise the impact going forward. The Company received a 100% subscription for its right issue of 98,26,638 equity shares of Rs 10 each at a premium of Rs 783 per share, aggregating to Rs 779.25 crores. The allotment of shares is in process.

The Company along with its wholly owned subsidiary has purchased shares from the joint venture partner, NGK Insulators Limited (“NGK”) in the joint venture Birla NGK Insulators Private Limited (“Birla NGK”). Consequently, Birla NGK has become a subsidiary of Aditya Birla Nuvo w.e.f. November 29, 2006. Its name has been changed as Aditya Birla Insulators Limited

This has impacted profitability of the quarter, given key large outflow of the funds for these investments. However, we believe, these strategic investments are solid and will yield handsome results to the company.

Substantial growth in revenue

Its consolidated revenue at Rs. 2288.78 crores, has risen by 69.5% vis-à-vis Rs. 1350.23 crores achieved in the corresponding quarter of the previous year. While the Telecom business has shown impressive growth in revenues and profit, it was neutralised by the ramping up costs of the Life Insurance and restructuring, accounting readjustment expense in the BPO - Minacs businesses. Additionally, the insulator JV became a subsidiary of Aditya Birla Nuvo from the 29th of November 2006. The performance of the business was affected by the strike, which also has resulted in losses. That despite these factors, net profit has been sustained at Rs. 55.34 crores as against Rs. 55.00 crores in the comparable quarter is indeed commendable. All of the businesses are on a high growth trajectory.

Telecom

IDEA Cellular’s subscriber base has increased to 12.4 million. Revenues for the quarter showed an impressive jump of 49.9% at Rs.1,148.20 crores. IDEA is set launch its IPO in a fortnight to raise Rs. 2,125 crores (excluding pre placement and 15% green shoe option) through the fresh issue of equity shares. It has received licenses for Mumbai and Bihar and has recently launched commercial operations in H.P., U.P. (E) and Rajasthan

ITESAt TransWorks, India revenues have risen by 17.9% to Rs. 49.76 crores vis-à-vis Rs. 42.22 crores in the corresponding quarter of the previous year. It has added 4 new clients during the quarter taking the total number of clients to 26. The Company improved its business mix with a growing share of non-voice business.

Minacs, Canada recorded a turnover of Rs. 327.78 crores and a loss of Rs. 28.27 crores consequent to higher ramp ups and training costs.

Aditya Birla Group