Birla Corp Shares Rise 3% Despite Lower Q4 Net Profit

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Shares of Birla Corporation, part of MP Birla Group, rose 3% in morning trade on May 10, even as the company reported a 24% year-on-year decline in its consolidated net profit to Rs 85 crore for the quarter ended March 2023.

The company posted a net profit of Rs 111 crore a year earlier. Shares traded nearly 2% higher at Rs 1,010 at 10:36 am on the NSE.

On the other hand, its operating income rose 9% year-on-year to Rs 2,463 crore in the quarter, compared to Rs 2,264 crore a year earlier. EBITDA fell 7% to Rs 323 crore from Rs 346 crore in Q4FY22.

The company’s revenue from the cement segment was Rs 2,344 crore, while that from the jute segment was Rs 119 crore. Sales in Q4FY23 were 4.44 million tonnes, up 4.5% year-on-year. The company’s capacity utilisation rate was 89%, down 17% year-over-year for the quarter. Mixed cement is also at 89%, compared to 77% for the trade channel.

“Despite subdued demand in most major markets, the company’s consolidated cement sales in the March quarter rose 4.5% year-on-year to 4.44 million tonnes, a record high, even as prices remained weak,” the company said in a filing.

Birla Corporation’s net profit fell 90% to Rs 40.5 crore in FY23 from Rs 399 crore in FY22. Its consolidated operating income in FY23 rose 16% to Rs 8,682 crore.

The company’s board has recommended a 25% dividend or Rs 2.50 per share for 2022-23. The board also approved the issuance of redeemable non-convertible bonds worth up to Rs 200 crore in a private placement within one year.

Birla Corporation’s consolidated net debt stood at Rs 3,659 crore at the end of March, compared to Rs 3,398 crore a year earlier. “The company has been working on reducing borrowing costs by renegotiating a term loan of Rs 2,200 crore,” it said. Birla Corporation’s market capitalisation has risen 10% in the last month.

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