Birla Corporation posts 28% rise in Q4 profit

Riding on the back of higher sales, Birla Corporation Ltd posted a 28 per cent growth in consolidated net profit at ₹249 crore for the quarter ended March 31, 2021, as against ₹195 crore same period last year.

Revenue from operations increased by 26 per cent at ₹2,133 crore for the quarter ended March 31, 2021, as compared with ₹1,690 crore same period last year.

Volume sales jumped by nearly 25 per cent to 4.17 million tonnes (mt). The company recorded a capacity utilisation of 108 per cent during the quarter under review.

Also read: Birla Corp Q3 profit surges 82% to ₹148 crore

The company’s board has recommended a dividend of ₹10 per share of face value of ₹10 each.

Full-year profit rises

For the year ended March 31, 2021, the company registered 25 per cent growth in net profit at ₹630 crore, as compared with ₹505 crore in the previous fiscal.

The company made up for the loss in production and sales at the beginning of the financial year by aggressively rationalising costs. Finance cost was pared by around 24 per cent to ₹296 crore. It also benefited from the better than expected recovery in cement demand from the second quarter onwards, especially in the rural sector, which was largely the outcome of the central government injecting cash into the economy by boosting infrastructure development, the company said in a press statement.

“In the wake of improved demand, Birla Corporation managed to raise prices during the March quarter, which led to marginal improvement in realisation per ton, but profitability came under pressure due to a sharp increase in raw material and fuel costs,” the statement said.

EBITDA per tonne for the March quarter was down by nearly 10 per cent on a year-on-year basis, however, for the full-year it went up by four per cent to ₹1,012.

Due to cost pressure, the cement division’s profit margin for the March quarter fell to 19.4 per cent from 21.8 per cent in the same period last year. However, for the full year, margin expanded by 80 basis points to 21 per cent.

“In the light of the massive disruptions faced at the beginning of the financial year, FY20-21 wasn’t disappointing from the standpoint of profitability. Our performance reflected the resilience we have built over the years to external shocks. We also benefited from the stimulus provided by the government. But in the wake of the second wave of the pandemic, the year ahead looks more challenging. To my mind, India’s ability to contain the pandemic through rapid inoculation and other means holds the key to economic revival,” Harsh Vardhan Lodha, chairman, Birla Corporation said in the statement.

Faced with disruption in sales and distribution at the beginning of the financial year, the company focused on improving efficiency by addressing weaknesses in its supply chain. It managed to deepen penetration and broaden its distribution reach by effective use of technology, while scaling back discretionary spending on advertising and marketing.

The company’s scrip closed at ₹1,043.50, up by 4.87 per cent on the BSE on Wednesday.

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