Diversified conglomerate Aditya Birla Group today said its various businesses, including mutual fund, life insurance, garments and BPO operations, have been impacted by the global slowdown in the third quarter of current fiscal.
According to an investor presentation by Aditya Birla Group on its third quarter performance, some of the Group's businesses have been impacted by the global slowdown and it is taking various initiatives, including cost control measures, to face the challenges.
Along with the entire mutual fund industry reeling under impact of volatile stock market and large redemption pressures seen mainly in October, Birla Sun Life AMC saw a plunge of 3 per cent in its average assets under management in the reviewed period against second quarter this fiscal.
"Industry's average AUM de-grew quarter-on-quarter by 20 per cent, while Birla Sun Life AMC could hold its de-growth to 3 per cent, the lowest quarter-on-quarter fall rate in the industry," the presentation filed to the stock exchanges today stated.
Meanwhile, the bottomline of the business was impacted by interest costs on temporary borrowings to meet redemptions, it added.
The group's Business Process Outsourcing operations suffered a hit on its revenue growth due to the downturn worldwide. The presentation said that the group is trying to improve operating efficiency through seats or sites rationalisation and cost control measures.
The group is taking several initiatives to face challenges, including cost control measures, working capital monitoring, raised long term funds of Rs 500 crore through issue of Non-Convertible Debentures (NCDs) and capital expenditure plans are being re-aligned to match growth outlook.
Besides, Birla Sun Life (BSLI) achieved a growth of 22 per cent in the third quarter of this fiscal compared to year-ago period, while the industry saw its growth plunging by 7 per cent, the presentation pointed out.
Further, the branch expansion would be re-aligned with growth outlook, while the sales force continues to grow. The group would also look at optimising product mix through launch of traditional products to suit market conditions, it added.
Aditya Birla Group's garment business suffered from the continued weak demand and higher discounting.
"New apparel retail initiatives (The Collective and Peter England People) could not achieve targeted growth due to unprecedented market conditions," the company said.
Moreover, the contract exports business faced weak order flow and order cancellation resulting in forex loss and under utilisation of capacity, it added.
Sales from the group's retail channel achieved 26 per cent year-on-year growth to support an overall six per cent revenue growth, however, new retail store launches had gestating impact on bottomline.
Meanwhile, the group's telecom, fertilisers and Viscose Filament Yarn (VFY) businesses have performed well.
