Birla Corporation Limited announces strong March quarter results, capacity expansion by FY28-29

VMPL
Kolkata (West Bengal) [India], May 10: Birla Corporation Limited concluded FY24-25 with robust quarterly production and sales by volume, which resulted in a consolidated net profit for the March quarter, growing 33% year-on-year (yoy), to Rs 257 crore. This came after three challenging quarters that had affected the entire industry. An uptick in demand and prices during the quarter led to better realization and a higher capacity utilization of 105% in the March quarter.
Though realization for the quarter at Rs 5,103 per ton was still marginally lower than the same period last year (Rs 5,178 per ton) owing to the changed geographical mix, consolidated revenue for the quarter at Rs 2,863 crore was 7% higher yoy. EBITDA per ton rose to Rs 1,014--one of the highest in recent years. It represents a growth of 5% yoy and 78% sequentially. The Cement Division's operating profit margin was 20% for the March quarter, compared to 18.6% in the same period last year, and 14% for the full year (15.5% in FY23-24).
Capex: With stabilization of earlier expansions, mainly at Mukutban, in Maharashtra, and Chanderia, in Rajasthan, and consolidation of the Company's position in the core markets of central India, Birla Corporation Limited is now embarking on its next phase of growth. The Board of Birla Corporation Limited, along with its subsidiary, RCCPL Private Limited, approved an investment of Rs 4,335 crore to scale up the production capacity from 20 million tons (mt) to 27.6 mt by 2028-29, by expanding an integrated unit and setting up three new grinding units. The expanded capacity includes the ongoing expansion at Kundanganj, which is progressing on schedule.
RCCPL Private Limited will invest Rs 2,300 crore into its Maihar (Madhya Pradesh) unit to expand its clinker production capacity. The clinker produced at Maihar will be fed to the three new grinding units, to be set up at Prayagraj, Gaya and Aligarh, for which Birla Corporation Limited, and its subsidiary, RCCPL, have budgeted for an investment of Rs 2,035 crore.
"Our capacity utilization in central and eastern India is more than 100%," said Shri Harsh V. Lodha, Chairman. "We expect cement demand to grow at a CAGR of 6-7% over the next few years. To improve our leadership position in high growth markets, we are ready for the next phase of growth. Addition of fresh capacity will have a favourable impact on profitability as well as reduce lead distances, with grinding units located closer to the market."
RCCPL continued to scale up production at its Mukutban unit, which in FY24-25 has significantly contributed to profitability. Commissioned in 2022, the 3.9-mt integrated unit is one of the most efficient cement plants in the country.
Through robust cash flow generation, Birla Corporation Limited has reduced its net debt to Rs 2,244 crore at the end of March against Rs 3,003 crore a year earlier. The Company's cost of borrowing at the end of March was 7.56%, down 35 basis points from a year earlier.

Weak pricing: The cement industry faced unprecedented pricing pressure through the first eight months of FY24-25. Prices fell 11% on an average till the end of December. For the full year, it is estimated that prices were on an average 4-5% lower than the previous year. For the full year, Birla Corporation's price realization was 7% lower, at Rs 4,866 per ton. It is estimated that cement manufacturers' profit margin contracted 130-180 basis points in FY24-25 owing to weak pricing.
Birla Corporation Limited's cement sales by volume for the March quarter grew 8% yoy to 5.2 mt. In FY24-25, the Company sold 18.1 mt of cement, compared to 17.6 mt in the previous year, up 2.5%. The full-year consolidated revenue, however, was down 4% at Rs 9,312 crore. Despite a sharp turnaround in the March quarter, consolidated net profit for the full year was down 30% yoy at Rs 295 crore.
Notwithstanding pressure on prices and demand, the cement industry benefited from benign power and fuel costs. Birla Corporation's power and fuel costs for the March quarter were at Rs 1,001 per ton, down 9% yoy, while for the full year, power and fuel costs fell 14% to Rs 1,035 per ton. The share of renewable power in the total power consumed during the year was at 24.8%, compared to 23.8% in the previous year.
As a pioneer of brand premiumization to increase value share (as distinct from volume share, which is the traditional measure of market share), Birla Corporation Limited managed to drive up sales of its premium products, led by its flagship brand Perfect Plus. The Company achieved in FY24-25 an 11% yoy growth in sales by volume of premium products. Premium products accounted for 60% of the Company's trade channel sales during the year against 54% in FY23-24. Perfect Plus has, on its own, grown 15% during the year, and now commands a premium in pricing over competitors in the Company's core market of Uttar Pradesh.

Birla Corporation Limited has entered the business of ready-mix concrete (RMC). The initial experience in the Uttar Pradesh market has shown encouraging results and the Company is now looking to scale up the business. The RMC business will potentially create further opportunities to shore up sales of the Company's premium products.
Re-appointment: Birla Corporation Limited's Board on Friday approved the re-appointment of Shri Sandip Ghose as Managing Director and CEO for three years effective 1 January 2026. Mr Ghose was responsible for developing the brand architecture of Birla Corporation Limited and launched the Company in its product premiumization journey. He also played a key role in the integration of operations of Birla Corporation and RCCPL. In his current term as the Managing Director and CEO, he has brought about transformative changes in the organization and was responsible for scaling up of the Mukutban operations. The Board has entrusted him with carrying forward the next phase of growth and expansion of the Company.
Jute: The Company sees its jute business as a unique asset that has significant potential to contribute to the topline as well as bottom line, alongside the main business of cement. With renewed management focus and improvement of operational efficiency, the Division is showing signs of turning the corner. After three consecutive quarters of losses, the Division has reported a cash profit of Rs 4.43 crore in the March quarter.
The Division has significantly reduced the conversion cost, while raising order execution, both domestic and overseas. Thanks to improved efficiency in raw jute procurement and better capacity utilization, the Division reduced conversion cost in the March quarter by almost 14% sequentially. Significant sales growth was also achieved during the quarter: domestic sales grew 8% yoy, while exports grew 18%. Average production per day increased 9% yoy and 18% sequentially.
In addition to its sustained focus on sales of value-added products, the Division has started exploring opportunities at increasing research and development in partnership with institutes of repute. This will facilitate collaborative research, product development, industrial trials and commercialization of new value-added fibres.
The Company has set a target for the Division's new leadership team to turn Birla Jute into the most efficient jute manufacturing unit in terms of cost, profitability and safety.
Birla Corporation Limited (MP Birla Group) was incorporated as Birla Jute Manufacturing Company Limited in 1919, it was given shape by Syt MP Birla. The Company has interest in cement and jute goods. Its Birla Jute Mills is the first jute mill started by an Indian entrepreneur. The Company and its subsidiary, RCCPL Pvt Ltd, have 10 cement plants, in eight locations, across the country, with an annual installed capacity of 20 million tons. The Company produces an array of cement products, under the MP Birla Cement brand, suited to different climatic conditions as well as consumer segments. It also sells construction chemicals and wall putty.
For more information, visit www.birlacorporation.com
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