The $28-billion Aditya Birla Group, 50% of whose revenues flow from overseas operations, is expected to report a bleak Q3 performance in its main businesses in the current financial year, say experts. The group has a major presence in metals, cement, textile and telecom. According to experts, the fourth quarter of FY09 as well as the next year (FY 2010) will be challenging for the group.

With base metal prices being corrected by more than 50% in the last couple of months, and demand for aluminium-rolled products slowing down in North America and Europe, Hindalco (including Novelis, the Canadian firm it acquired in early 2007 for $6 billion) is expected to de-grow 12% in top line and bottom line in the third quarter of the fiscal.

Meanwhile, BNP Paribas has turned cautious on Novelis as US and Europe, which account for about 70% of Novelis? deliveries, are witnessing a 9-12%dip in demand. ?We expect Novelis to report a minor loss in 2009 due to lower volume and profit margin. We are modeling a 20% volume decline in the second half of FY09 and a 7% decline in FY10,? said Priti Dubey, an analyst with BNP Paribas Securities India Pvt Ltd.

Similarly, there seems to be no hope of cement showing any exciting performance as well. This time, the main area of concern for Grasim, another group firm, remains the viscose staple fibre (VSF) business, which had announced a 30% production cut at its Nagda (MP) and Kharach (Gujarat) plants, citing global slowdown of economic activity and rising inflation impacting the textile industry.

?In the second quarter FY09, Grasim?s VSF business reported a volume of 62,000 tonne. However, after the production cut announced in the end of October 2008, VSF volumes in Q3 are expected to dip by 20% compared to the year-ago period.?

Moreover, hit by slowdown in the housing sector and huge capacity additions, Grasim and UltraTech are expected to report a de-growth by about 35% and 20%, respectively, in their bottom line. Says Hitesh Agrawal, head-research, Angel Broking, ?Correction in cement prices and lower volumes due to lower demand will keep cement companies? margins under pressure.?

The group also owns Idea Cellular where the subscriber growth is expected to result in 45% top line growth. However, on the back of higher network expansion cost and given the large capex undertaken by the company to expand its networks into the interiors of the country, the margins will remain under pressure.