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Birla Corporation posted a consolidated net loss of ₹56 crore during the quarter ended September 30, 2022 due to a sharp surge in power and fuel costs as against a net profit of ₹86 crore in the same period last year.
The company’s board, on Tuesday, approved the appointment of Sandip Ghose as Whole-time Director from December 1 to December 31, 2022, and as the Managing Director and Chief Executive Officer, effective January 1, 2023, for a period of three years, subject to approval of shareholders. Arvind Pathak is stepping down as Managing Director and Chief Executive Officer due to personal reasons.
High costs
The drop in net profit was despite a double-digit growth in cement sales. The company’s sales in volume terms grew by around 11 per cent to 3.64 million tonnes during the quarter under review.
Revenue from operations on a consolidated basis increased by nearly 18 per cent to ₹2,000 crore (₹1,698 crore).
“The September quarter profitability was impaired by a sharp increase in power and fuel costs, which could not be passed on to consumers in the seasonally weak monsoon quarter. Faced with a substantial increase in production cost, EBITDA for the September quarter fell 51.6 per cent year-on-year to ₹136 crore,” the company said in a press statement.
Power and fuel cost increased by nearly 80 per cent to ₹608 crore (₹338 crore). Total expenses went up by nearly 33 per cent to ₹2,124 crore (₹1,592 crore).
Mukutban unit
Commercial production at the company’s subsidiary, RCCPL Private Ltd’s 3.9 million tonne integrated cement plant at Mukutban in Maharashtra commenced in end-April. Profitability was also impacted by the costs related to the newunit, pending stabilisation of operations. In the current financial year, the Mukutban plant is expected to produce around one million tonnes of cement.
The company’s bottomline was also impacted by higher interest and depreciation costs on account of the Mukutban unit, which was set up at an investment of ₹2,744 crore. When scaled up to full capacity, the Mukutban unit will augment its production capacity to 20 million tonnes, it said.
Excluding Mukutban, the company’s EBITDA for the September quarter was down 31 per cen at ₹194 crore. Capacity utilisation for the quarter was at 74 per cent, and 89 per cent on a like-for-like basis (excluding Mukutban).
“Owing to excessive cost pressure, EBITDA per ton fell to ₹234 a tonne against ₹762 a tonne in the same period last year. Excluding Mukutban, EBITDA per tonne was at ₹409, down 46.3 per cent on a comparable basis,” it said.
Birla Corporation had, in October, secured a new coal mine, Marki Barka, in Madhya Pradesh through auction. It has a geological reserve of 70 million tons of coal and a peak rated capacity of producing 1 million tons a year. It is expected to become operational within FY-26, and will replace expensive imported fuel, it said.
The company’s scrip closed at ₹1007.15, up 3.71 per cent on the BSE on Tuesday.
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