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Birla Corporation Ltd, the flagship company of the MP Birla Group, registered a 24 per cent rise in standalone net profit at Rs 84 crore for the quarter ended September 30, 2020, as compared with Rs 68 crore same period last year.
Revenue from operations was however down by five per cent on a standalone basis at Rs 1,092 crore during the period under review, as against Rs 1,144 crore same period last year.
On a consolidated basis, net profit increased by nearly 89 per cent to Rs 167 crore (Rs 88 crore). Consolidated revenue was marginally up by around two per cent at Rs 1,675 crore.
The company’s EBITDA and cash profit jumped to a record high backed by sustained cost rationalisation initiatives and a “better-than-expected recovery in cement demand” in key markets, the company said in a press statement.
Birla Corp’s EBITDA for the September quarter stood at around Rs 404 crore, a growth of nearly 22 per cent.
“Even amidst continuing disruptions in the construction sector due to the Covid-19 pandemic, recovery in cement demand in some of our key markets was better than expected. This was largely on account of demand for rural housing and government spending on rural infrastructure,” the release said.
The average realisation per ton was up by 1.3 per cent to Rs 4,862 a ton.
Company comment
The company’s sustained efforts on cost rationalisation helped bring down expenses for the September quarter by as much as four per cent by substantially rationalising power, fuel and finance costs, while scaling back discretionary expenditure such as on advertising and marketing.
In a press release, Harsh Vardhan Lodha, Chairman, Birla Corporation said: “It is a matter of great satisfaction that the units under RCCPL, which we acquired in 2016, today rank amongst the most efficient and profitable cement plants in the country, making Birla Corporation one of the market leaders in central India."
"We have charted out on how to make the company more competitive. We have also discussed with our board and finalized a plan to scale up our capacity to 25 million tons by 2025,” he added.
The company continued to focus on sales of premium and blended cement and also added some new brands to its portfolio. Share of premium cement in sales through the trade channel was scaled up to 48 per cent for the September quarter as against 41 per cent in the same period a year earlier.
In view of the recovery witnessed in the past few months, the company has decided to bring back on track its Rs 250-crore capacity expansion project at Kundanganj, which, was put on hold in May this year due to uncertainties over cement consumption.
The company’s scrip closed at Rs 643.50, up by 0.45 per cent on the BSE on Thursday.
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