Tag: Birla Corporation

Birla Corp trims FY24 volume guidance on tepid demand in some markets

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Birla Corporation, flagship company of the MP Birla Group, has trimmed its volume guidance for the current financial year (FY24) to 13% from 15% due to tepid market conditions.

Though the demand from infrastructure and commercial segments continues to be strong, the housing sector, especially rural housing is subdued in some of the markets, the company’s Chief Financial Officer, Aditya Saraogi, told CNBC-TV18.

The Kolkata-based company, however, retained its guidance for earnings before interest, tax, depreciation, and amortisation (EBITDA) at ₹850 per tonne for FY24 despite some pressure on realisations.

The EBITDA per tonne for the third quarter was around ₹903 per tonne and for the first nine months of FY24 (9MFY24) it was ₹749 per tonne. This means the company will have to earn an EBITDA of ₹1,050-1,100 per tonne in the fourth quarter (Q4FY24).

Saraogi believes the EBITDA per tonne target is achievable as the new cement plant at Mukutban in Maharashtra is increasingly contributing to the profitability, with costs declining and volumes ramping up.

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The improvement in EBITDA is also a result of cost saving programme that the company has initiated, which has been in the range of ₹16-17 per tonne. “We expect another incremental ₹20-30 per tonne in the next quarter,” he said.

The Mukutban plant is eligible for fiscal incentives for 20 years, which Saraogi expects to begin accruing from the fourth quarter this year (Q4FY24).

The Kolkata-based company reported consolidated net profit of ₹109 crore in the third quarter of the year (Q3FY24) versus net loss of ₹50 crore in the same quarter last year. Consolidated revenue grew nearly 15% year-on-year (YOY)  to ₹2,312 crore from ₹2,016 crore.

Birla Corporation has a net debt of ₹3,470 crore as of December and expects to close below ₹3,400 crore in Q4FY24 keeping the net debt to EBITDA ratio below a sustainable 3x level.

The market capitalisation of Birla Corporation is ₹11,687 crore.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Birla Corp sticks to 15% volume growth guidance for FY24; next price hike in Q4

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Birla Corporation, the flagship company of the MP Birla Group, is holding steady with its guidance for the financial year 2024, aiming for a 15% growth in volumes and an EBITDA (earnings before interest, tax, depreciation, and amortisation) per tonne of around ₹850.

Last week, the company reported a jump of over 12% in its second-quarter standalone net sales to ₹1,417.66 crore from ₹1,262.78 crore in September 2022. Net profit rose to ₹47 crore from ₹17 crore in September 2022. Its EBITDA came in at ₹150.85 crore versus ₹43.52 crore in September 2022.

In a chat with CNBC-TV18, CFO Aditya Saraogi explained that while average EBITDA per tonne in the first half of the year was subdued at around ₹700, the company expects an upturn in the second half, driven by higher volumes and slightly better realisation.

Key to this improvement will be the performance of the Mukutban plant in Maharashtra, which is exceeding volume expectations and will benefit from additional incentives in the fourth quarter.

Saraogi said the Mukutban project is surpassing expectations in both cost management and volume production. “We are likely to achieve our annual target of two lakh tonnes even faster than planned,” Saraogi remarked. The rapidly decreasing costs at the plant, coupled with the incentives, are set to make a significant contribution to the company’s fourth-quarter performance.

The company’s Mukutban plant is eligible for fiscal incentives for 20 years, which is expected to be received in the second half of the current financial year.

On the pricing front, the company implemented an average increase of about 3% in October. While no immediate further increases are planned, additional hikes may occur towards the end of the third quarter and the beginning of the fourth quarter.

Birla Corporation has a debt of ₹3,550 crore as of September and expects to keep the Net Debt to EBITDA ratio within a sustainable 3x level.

Currently, the company is not pursuing new acquisitions, choosing to focus on maximizing the potential of its existing assets, including its six plants located in Maihar, Satna, Kundangunj, Raebareli, Chanderia, and Mukutban.

Also Read | Birla Corporation faces ₹8.42-crore penalty for environmental violation in the past

The Kolkata-based company has a market capitalisation of ₹9,812 crore. Shares of the company were trading at ₹1,299 apiece, up nearly 2% on the NSE on November 17.  The shares have gained around 1% over the last month versus marginal losses in the benchmark Nifty 50.

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Birla Corporation faces ₹8.42-crore penalty for environmental violation in the past

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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MP Birla Group flagship company Birla Corporation Ltd on Tuesday (October 10) said the company is facing a ₹8.42-crore penalty for excess limestone production in Madhya Pradesh in the period 2000-01 to 2006-07 without the requisite environmental clearance as stipulated by the Environmental Impact Assessment (EIA) notification of 1994.

The company recently received an order, dated October 9, 2023, from the Office of Collector (Mining), Satna in Madhya Pradesh.

The company has explained that it did not obtain environmental clearance during that period due to the ambiguity present in the provisions of the EIA Notification of 1994.

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It’s worth noting that the clarity on these provisions only emerged later, following the principles established in the Common Cause judgment delivered by the Supreme Court on August 2, 2017.

While the company didn’t secure environmental clearance during the mentioned timeframe, it asserts that it did maintain valid consent to operate its mines from the State Pollution Control Board.

This underscores the complexity of the situation, as the company had adhered to state-level regulations but now faces penalties for failing to meet central level environmental clearance requirements.

Upon receiving the order from the Office of Collector (Mining), Birla Corporation Ltd swiftly initiated a review of the situation. The company is diligently evaluating its next steps in response to this development.

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Shares of Birla Corporation Ltd ended at ₹1,256.50, up by ₹3, or 0.24 percent, on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Birla Corp posts 23% decline in Q4 net profit, declares dividend of Rs 2.50 per share

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The MP Birla Group company Birla Corporation Ltd on Tuesday, May 9, reported a 23.4 percent year-on-year (YoY) decline in net profit at Rs 85 crore for the fourth quarter that ended March 31, 2023.

In the corresponding quarter last year, the company posted a net profit of Rs 111 crore. CNBC-TV18 Polls had predicted a profit of Rs 54 crore for the quarter under review.

In the March quarter, total revenue stood at Rs 2,462.6 crore during the period under review, up 8.8 percent against Rs 2,264 crore in the corresponding period of the preceding fiscal. CNBC-TV18 Polls had predicted revenue of Rs 2,405 crore for the quarter under review.

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At the operating level, EBITDA declined 1 percent to Rs 274.4 crore in the fourth quarter of this fiscal over Rs 277 crore in the corresponding period in the previous fiscal.

The EBITDA margin stood at 11.1 percent in the reporting quarter compared to 12.2 percent in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation.

For the full year, the company registered a 16.3 percent growth in revenue. On a comparable basis (excluding Mukutban) the company’s revenue for the March quarter and the full year were up 1.5 percent and 12 percent, respectively. This was achieved through optimum geo-mixing of sales and ramping up sales of premium cement while maintaining high capacity utilisation.

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Despite sluggish demand in most key markets, the company’s consolidated cement sales by volume for the March quarter grew 4.5 percent year-on-year to 4.44 million tonnes (MT), a record high, and even with price remaining weak, realisation was up 4.3 percent over the same period last year at Rs 5,261 per tonne. For the full year, consolidated sales by volume grew l0.6 percent to 15.73 MT.

The cement division registered an EBITDA per tonne of Rs 615 for the March quarter, versus Rs 650 last year, and Rs 689 on a like-for-like basis, that is excluding the newly-commissioned Mukutban unit, which represents a growth of 6 percent on a comparable basis.

Sales of premium cement were maintained at 51 percent for the full year and were raised to 54 percent for the March quarter (51 percent in the same period last year).

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The company’s consolidated net debt at the end of March 2023 stood at Rs 3,659 crore against Rs 3,398 crore a year earlier. The company is constantly working towards reducing its borrowing cost, renegotiating Rs 2,200 crore of term loans.

The board of directors recommended a dividend of Rs 2.50 per share (i.e. 25 percent) on ordinary shares for the financial year 2022-23.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Birla Corporation optimistic for the second half of fiscal as input cost pressure subsides

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The MP Birla group’s flagship company, Birla Corporation Ltd reported a loss of Rs 56 crore in the quarter ended September, down from a net profit of Rs 86 crore in the year-ago period.

The company said that the profitability of BCL during the second quarter was impaired by rising power and fuel costs which could not be passed on to the consumers.

Taking to CNBC-TV18, Aditya Saraogi, CFO, Birla Corporation said that the price increases have been in the range of Rs 5-10. “In central and north I believe it is Rs 5 and east and west it has been Rs 10,” he said.

However, Saraogi said that the input costs could be lower by Rs 50/tonne in the third quarter and by Rs 100/tonne in the fourth quarter. “We will see a peak of petcoke prices of about $250. From there it had come down to as low as $165. It has again inched up and stabilized around $190 currently. $175 to $190 should be range for fuel prices. So, at this level, I would expect the cost benefit on account of fuel to be in the range of Rs 50 to Rs 150 per tonne.”

EBITDA, a measure of underlying profitability, of the company in the current second quarter declined 51.6 percent to Rs 136 crore from Rs 281 crore in the similar previous period of 2021-22.

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Saraogi said that the second half margin will be better than the first half. “The second half margin should be much better than what we have done in the first half. Because in terms of both the fuel rate, as well as the realizations, we are behind a peak and bottom respectively, which we witness in the second quarter. So going ahead, we see improvement in the realization. On both the accounts, we should be doing better in the remaining part of the year,” Saraogi said.

Revenue of the company increased 19.3 percent at Rs 2042 crore during the second quarter as compared to Rs 1711 crore in the previous similar period, a statement by the primarily cement manufacturing firm said on Tuesday.

Saraogi stated that the company is maintaining guidance of 15 percent growth in FY23. “In terms of demand, October has not been that great because of festivities all across. But we do expect the demand to improve in the coming weeks and months. And yes, we are sticking by our guidance of 15 percent growth for this year,” he said.

The company is optimistic that the EBITDA per tonne for the second half of the fiscal could be Rs 650/tonne. “Our EBITDA per tonne should definitely be better than what we have done in the first half. At this juncture, that (Rs 650/tonne) is the expectation we have, but a lot will depend on the market conditions as well,” Saraogi said.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

UltraTech top bet in cement cos; eye on Birla Corp in midcap space: Nirmal Bang

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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UltraTech Cement posted a mixed set of Q2FY22 earnings. There was a mild beat on the revenue front and volumes are in-line, but margin has come in below estimated levels owing to higher expenses. The company reported a net profit of Rs 1,313.5 crore for the quarter ended September 30, marking an increase of 12.6 percent when compared with the corresponding period a year ago. Revenue from operation grew 15.7 percent on a year-on-year basis to Rs 12,017 crore for the quarter under review. Mangesh Bhadang, Reseach Analyst at Nirmal Bang Institutional Equities, shared his perspective on the company.

He said, “It is better to be with UltraTech rather than any other player.”

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He added, “We believe that this is going to be similar for the entire industry. Within the industry if one has to choose one player who can weather this cost storm well, that has to be UltraTech given its size, reach and the kind of skills that they have.”

The company will be passing on the cost increases to the consumers. “In our opinion, that may impact the demand negatively but the impact is going to be more severe on cost as well as on the realization front for other industry players than it is going to be for UltraTech,” he explained.

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Within midcaps, the stocks that one needs to look at are Birla Corporation and Sagar Cements, he shared.

“At current prices, I would also look at Ramco Cements. That is the company for which the capex has been over and for the next two-three years they can look at volume growth,” he said.

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“Companies we choose are the companies, which are going to show volume growth and which are efficient and have a relatively better reach and brand in the market. Those are the ones one should look at,” he explained.

For the full interview, watch the accompanying video.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow