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Aditya Birla Nuvo
A possible insurance play
Company profile
Aditya Birla Nuvo is a diversified conglomerate with interests in viscose
filament yarn, carbon black, branded garments, agri-business, textiles and
insulators. Through its subsidiaries and joint ventures, the company has made
forays into life insurance, telecom, business process outsourcing (BPO), IT
services, asset management and financial services.
The company has leading positions in various businesses. It is India’s largest
premium-branded apparel company and also the country’s largest
manufacturer of linen fabric.
The company’s noteworthy joint venture and subsidiary companies are: Idea
Cellular Ltd, Birla Sun Life Insurance, Birla Sun Life Asset Management and
Aditya Birla Minacs Worldwide Limited
Outlook
Telecom is growing ahead of the pack: In FY10, Idea cellular business
clocked growth of 22% YoY and had a customer base of 67 million. Despite
the overcapacity and hyper competition in the telecom market, Idea has
remained the fastest-growing telecom operator in India for three consecutive
years. With the introduction of 3G and number portability, the company should
be able to expand its customer base.
Financial arm to benefit from reach: The financial services business caters
to a strong customer base of 5.5 million, with more than 1,550 branches and
200,000 channel partners. With rising disposable incomes combined with
growing awareness of insurance, the segment is poised to grow in the long
term.
Carbon Black supported by robust auto demand: Tyre volumes will likely
continue to grow as many tyre companies like Apollo Tyres, JK Tyres,
Michelin and Bridgestone are expanding capacity to meet the increasing
demand for both new and replacement tyres. With its 170,000 MT capacity
expansion, Hi-tech Carbon looks well positioned to tap the demand growth
and improve its market share.
Aditya Birla Nuvo Aide Memoire
Issues
Insurance Business (Birla Sun Life Asset Management)
1. What is the trend for new business margins for the life insurance business? How have they been impacted post the new
IRDA guidelines? What do you think the sustainable new business margins are for you?
2. What is the growth you are targeting for FY11 in terms of a new business premium and also what is the medium-term
outlook for growth?
3. What is your take on long-term growth prospects for the industry? Do you think the long-term growth drivers of the industry
remain intact?
4. Are you facing issues of agent dissatisfaction in view of lower commissions on ULIPs? Do you see lower commissions as a
hindrance for your company and/or the larger industry to attract talent?
Manufacturing Business (Carbon Black, Agri-business, Rayon, Insulators, Textiles)
Hi-Tech Carbon
1. Your company recently entered into a definitive agreement to acquire Atlanta-based Columbian Chemicals Company
(CCC) for $875m. Will the issue of additional debt put stress on the company’s balance sheet?
2. By acquiring CCC, exposure of Aditya Birla Nuvo to the US and Europe will increase significantly. With their auto markets
still recovering, how do you see demand for Carbon Black to shape up in these regions?
3. In the wake of recent moderation in IIP growth and rising inflation, how do you see growth of manufacturing business in the
next 2 years?
Telecom: Idea Cellular
1. Out of the eleven service areas where Idea won 3G spectrum, how many have seen 3G rollout? What kind of revenue
contribution do you expect from 3G services in the medium term?
2. Do you expect any meaningful impact (positive/impact) from Mobile Number Portability scheme to your market share?
3. What is you pricing strategy for 2G services? Where do you see ARPUs moving from here?
4. What are your expectations from new telecom policy? What could be the possible impact of moving from the current policy
of allocating additional spectrum on the basis of subscriber base? Impact on your company as well as other players?
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Aditya Birla Nuvo
A possible insurance play
Company profile
Aditya Birla Nuvo is a diversified conglomerate with interests in viscose
filament yarn, carbon black, branded garments, agri-business, textiles and
insulators. Through its subsidiaries and joint ventures, the company has made
forays into life insurance, telecom, business process outsourcing (BPO), IT
services, asset management and financial services.
The company has leading positions in various businesses. It is India’s largest
premium-branded apparel company and also the country’s largest
manufacturer of linen fabric.
The company’s noteworthy joint venture and subsidiary companies are: Idea
Cellular Ltd, Birla Sun Life Insurance, Birla Sun Life Asset Management and
Aditya Birla Minacs Worldwide Limited
Outlook
Telecom is growing ahead of the pack: In FY10, Idea cellular business
clocked growth of 22% YoY and had a customer base of 67 million. Despite
the overcapacity and hyper competition in the telecom market, Idea has
remained the fastest-growing telecom operator in India for three consecutive
years. With the introduction of 3G and number portability, the company should
be able to expand its customer base.
Financial arm to benefit from reach: The financial services business caters
to a strong customer base of 5.5 million, with more than 1,550 branches and
200,000 channel partners. With rising disposable incomes combined with
growing awareness of insurance, the segment is poised to grow in the long
term.
Carbon Black supported by robust auto demand: Tyre volumes will likely
continue to grow as many tyre companies like Apollo Tyres, JK Tyres,
Michelin and Bridgestone are expanding capacity to meet the increasing
demand for both new and replacement tyres. With its 170,000 MT capacity
expansion, Hi-tech Carbon looks well positioned to tap the demand growth
and improve its market share.
Aditya Birla Nuvo Aide Memoire
Issues
Insurance Business (Birla Sun Life Asset Management)
1. What is the trend for new business margins for the life insurance business? How have they been impacted post the new
IRDA guidelines? What do you think the sustainable new business margins are for you?
2. What is the growth you are targeting for FY11 in terms of a new business premium and also what is the medium-term
outlook for growth?
3. What is your take on long-term growth prospects for the industry? Do you think the long-term growth drivers of the industry
remain intact?
4. Are you facing issues of agent dissatisfaction in view of lower commissions on ULIPs? Do you see lower commissions as a
hindrance for your company and/or the larger industry to attract talent?
Manufacturing Business (Carbon Black, Agri-business, Rayon, Insulators, Textiles)
Hi-Tech Carbon
1. Your company recently entered into a definitive agreement to acquire Atlanta-based Columbian Chemicals Company
(CCC) for $875m. Will the issue of additional debt put stress on the company’s balance sheet?
2. By acquiring CCC, exposure of Aditya Birla Nuvo to the US and Europe will increase significantly. With their auto markets
still recovering, how do you see demand for Carbon Black to shape up in these regions?
3. In the wake of recent moderation in IIP growth and rising inflation, how do you see growth of manufacturing business in the
next 2 years?
Telecom: Idea Cellular
1. Out of the eleven service areas where Idea won 3G spectrum, how many have seen 3G rollout? What kind of revenue
contribution do you expect from 3G services in the medium term?
2. Do you expect any meaningful impact (positive/impact) from Mobile Number Portability scheme to your market share?
3. What is you pricing strategy for 2G services? Where do you see ARPUs moving from here?
4. What are your expectations from new telecom policy? What could be the possible impact of moving from the current policy
of allocating additional spectrum on the basis of subscriber base? Impact on your company as well as other players?
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