Key Highlights 3 – 7 Business-wise Performance 8 – 20 Going Forward 21 Financials and other Annexure 22 – 41 Note 1 : The financial results of ABNL are consolidated financials prepared as per Ind-AS unless otherwise specified Note 2 : The financial figures in this presentation have been rounded off to the nearest ` 1 Crore Glossary RMS – Revenue Market Share CY – Current Year ROACE – Return on Avg. Operating Capital Employed based on EBIT FY – Financial Year (April-March) VLR – Visitor Location Register PY – Corresponding period in Previous Year VAS – Value Added Services PQ – Previous Quarter TPA – Tons per annum Q1– April-June AAUM – Quarterly Average Assets under Management Q2– July-September FYP – First Year Premium Income YTD – Year to date PPI – Prepaid Payment Instrument CAB – Corporate Agents and Brokers Banca - Bancassurance 2 Aditya Birla Financial Services ` 2,17,840 Crore ` 31,823 Crore Funds under Management1 as on Loan book (Incl. Housing Finance) as 30th Sept 2016 (20%↑ y-o-y) on 30th Sept 2016 (54%↑ y-o-y) Revenue EBT Q2: ` 2,535 Cr. (29%↑ y-o-y) Q2: ` 348 Cr. (66%↑ y-o-y) YTD: ` 4,703 Cr. (21%↑ y-o-y) YTD: ` 631 Cr. (41%↑ y-o-y) Telecom (Idea Cellular) 19.3% (Q1 FY17) ` 1,941 Crore (Q2 FY17) 3rd largest in India with improved Standalone3 post tax cash profit revenue market share2 (PY: 18.7%) supporting balance sheet & growth plans 2 1 Includes AUM of Life Insurance, Private Equity and quarterly average AUM of Asset Management businesses Based on gross revenue for UAS and mobile licenses only (Source : TRAI) 3 3 Standalone = Idea Cellular and its wholly owned subsidiaries Divisions (Jaya Shree, Indo-Gulf fertilisers, Indian Rayon, Aditya Birla Insulators) 21% p.a. ` 566 Crore (Pre tax) Healthy ROACE (H1FY17) Strong FCF to firm (H1FY17) 6,200 TPA ~750 TPA Almost doubling linen yarn capacity from Scaling up VFY capacity at a capex of 3,400 TPA to 6,200 TPA by Q1 FY18 ` 40 Cr. by Q1 FY18 New Ventures Solar Power Payments Bank Financial closure & land acquisition in Targeting to launch services by the first process for 60 MW projects in Karnataka half of 2017, subject to RBI approval 4 Draft scheme of arrangement has been filed with the Stock Exchanges. After receipt of NOC from the Stock Exchanges, the Scheme will be filed with the Gujarat High Court Adjusted share exchange & share entitlement ratio on account of sub-division of Grasim’s equity shares from 1 equity share of Rs. 10 each to 5 equity shares of Rs. 2 each w.e.f. 6th October 2016 Share Exchange Ratio : Pursuant to amalgamation of ABNL with Grasim, shareholders of ABNL will be allotted 15 equity shares of Rs. 2 each of Grasim in exchange of every 10 equity shares of Rs. 10 each held in ABNL Share Entitlement Ratio : Pursuant to de-merger of Financial Services business, shareholders of merged entity (Grasim) will be entitled to and allotted 7 equity shares of Rs. 10 each of Aditya Birla Financial Services Ltd. for every 5 equity shares of Rs. 2 each held in the merged entity (Grasim) The transaction is subject to regulatory approvals and is expected to be completed by the first half of the calendar year 2017. 5 Standalone Net Debt Standalone Ratios ( ` Crore) 3,935 Net Debt/annualised EBITDA Net Debt/Equity 3,584 3,196 4.6 2,199 3.0 2.6 2.3 O/s 0.46 1,151 1,193 1,112 0.39 0.42 772 Fertilisers 0.22 Mar'14 * Mar'15 * Mar'16 Sept'16 Subsidy Mar'14 * Mar'15 * Mar'16 Sept'16 Led by proceeds of ` 1,664 Cr. from sale of 23% stake in Birla Sun Life Insurance (BSLI) and realisation of fertiliser subsidy, Net Debt stand reduced by ` 1,736 Cr. during the half year Further realised fertiliser subsidy of ` 480 Cr. in Oct-Nov ‘16 Annual Capital requirements for FY17 are : Capex of ~` 325 Cr. for divisions including ` 191 Cr. & ` 40 Cr. towards Linen Yarn & VFY capacities expansion Capital requirement of ~ ` 900 Cr. for Financial Services businesses including new ventures – Payments Bank and Health Insurance During H1 FY17, spent capex of ` 96 Cr. for divisions & infused capital of ` 372 Cr. in Financial Services * Reported financials as per Indian GAAP 6 Revenue1 EBITDA 1 Net Profit 1 ( ` Crore) ( ` Crore) ( ` Crore) 3,594 3,284 1,049 322 283 Q2 9% 713 12% 47% FY16 FY17 FY16 FY17 FY16 FY17 6,790 2,020 2 6,475 674 587 Half 1,440 5% Year 40% 13% FY16 FY17 FY16 FY17 FY16 FY17 Note 1: The Company has adopted Indian Accounting Standards (Ind AS) w.e.f. 1st April 2016. The financials for the quarter and half year ended 30th September 2015 are also Ind AS compliant. The above financials have been reviewed by the Audit Committee and taken on record at the Board meeting held on 10 th November 2016. Note 2: Excluding exceptional gain of ` 355 Cr. pertaining to cessation of Pantaloons Fashion & Retail Ltd. as subsidiary of ABNL. Note 3: Solar JV, Idea Cellular Ltd. and Birla Sun Life Asset Management Co. Ltd. have been consolidated based on equity accounting as per Ind AS. 7 Performance highlights : Q2 FY 2016-17 8 Funds under Management1 crosses ` 200,000 Cr. mark (20%↑ y-o-y) Among Top 5 ABFS Lending book (incl. Housing) crosses ` 30,000 Cr. mark (54%↑ y-o-y) Fund Managers in India (excl. LIC) Improved market standing Birla Sun Life # 4 Insurance NBFC business continues to grow ahead of the market Private Life Insurance Company in India Market share improved y-o-y in the Life Insurance, Asset Management and Insurance Advisory businesses Birla Sun Life # 4 AMC Asset Management Company in India Strategic Updates Having received IRDAI approval, the health Insurance business is Among Aditya Birla Finance targeting to launch retail products in Q3FY17. Top 7 Private NBFCs in India (excl. HFCs) Revenue (` Crore) EBT (` Crore) Among Aditya Birla Insurance (Established businesses2) (Established businesses2) Top 5 Brokers 4,570 696 General Insurance brokers in India 3,847 494 2,462 376 1,951 Aditya Birla Money 19% 238 41% # 1 MyUniverse 26% 58% Personal Finance Management Portal Q2FY16 Q2FY17 H1FY16 H1FY17 Q2FY16 Q2FY17 H1FY16 H1FY17 1Includes AUM of Life Insurance, Private Equity & quarterly AAUM of Asset Management businesses 2 Established businesses include Life Insurance, Asset Management, NBFC, Private Equity, Broking, Wealth Management & General Insurance Broking businesses 9 Aditya Birla Finance Ltd. (ABFL) - NBFC Among Ranking Channel & WCDL Top 7 Vendor 3% 3% Private NBFCs in India (excl. HFCs) Bonds 1% Term Loan Broker 3% 22% Retail 6% ` 28,951 Cr. 47%↑y-o-y Corporate Promoter 6% Loan 4% Loan book as on 30th Sept ’16 (Excl. HFC) Loan Mix ` 28,951 Cr. Construction Structured (Sept’16) Growing its well diversified portfolio ahead of the market Finance 6% Finance 2% Steady growth across all the segments LRD 7% Project Loan Continuously growing unsecured lending portfolio - Plans to LAP 22% 12% expand footprint from current 6 to 18 locations by FY17 end Others 3% Portfolio quality continues to be strong led by robust (` Crore) Q2FY16 Q2FY17 ∆ % credit appraisal and risk management framework Gross NPA at 0.74% (PY: 0.90%) stands lowest among Revenue 562 822 46%↑ the top 5 NBFCs operating in similar lines of business EBT 140 222 59%↑ Net Worth 2,579 4,066 58%↑ Net NPA at 0.32% (PY: 0.27%) Strong growth in earnings and sound return ratios Return Ratios H1 FY16 H1 FY17 ROE (p.a.) 15.1% 15.3% Healthy internal accruals supporting loan book growth ROA (p.a.) 2.14% 2.07% Net Worth crosses ` 4,000 Cr. mark Note : ROE & ROA are based on monthly average as per Indian GAAP 10 Birla Sun Life Insurance Co. Ltd. (BSLI) Ranks # 4 in India with new business1 market share at 8.5% (Apr – Sep’16) In Q2, New business premium grew y-o-y by 33% to ` 486 Cr. (` Crore) Gross Individual Life FYP rose by 5% to ` 170 Cr. and Group FYP Q2FY16 Q2FY17 ∆ % Premium rose by 56% to ` 316 Cr. First Year 365 486 33%↑ Improvement in quality of business (H1 FY17) - Individual 162 170 5% ↑ 13th month persistency improved y-o-y from 59.6% to 67.7% - Group 203 316 56%↑ Share of traditional products increased to 72% (PY: 63%) Renewal 830 748 10%↓ Share of Non PAR increased to 27% (PY: 10%) Total 1,194 1,234 3% ↑ Augmenting distribution strength for balanced channel mix Non Agency channels contributed to 25% (PY: 17%) of Individual New business premium income during the half year AUM at ` 33,800 Cr. (10%↑ y-o-y) Note 1: In terms of Annual Premium Equivalent (APE) among private sector players 11 Birla Sun Life Asset Management Co. Ltd. (BSLAMC) Ranks # 4 in India with AAUM market share at 10.49% (PY: 10.15%) (` Crore) Equity ranking at #4 with 8.04% share (PY: 7.42%) Q2FY16 Q2FY17 ∆ % Total AAUM rose by 22% y-o-y and 12% q-o-q to ` 183,033 Cr. AAUM 150,271 183,033 22%↑ Revenue 193 243 26%↑ Strong focus on scaling up retail and high margin assets EBT 96 96 Domestic Equity AAUM rose to ` 40,779 Cr. (31%↑ y-o-y, 17%↑ q-o-q) Net Worth 722 966 34%↑ PMS AAUM more than doubled y-o-y to ` 2,154 Cr. (44%↑ q-o-q) AAUM from B-15 cities grew y-o-y by 50% vis-à-vis 38% industry growth from B-15 cities (Source: CAMS) Market Share Consistently gaining market share with focus on retail segment Total AAUM Equity AAUM Q2FY17 ∆% (y-o-y) 10.49% Share of Equity in domestic AAUM 24.1% 83 bps↑ 10.15% Live SIP market share 9.82% 45 bps↑ 7.42% 8.04% Monthly SIP book size ` 372 Cr.