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Birla Corp Q3 PAT jumps 82% to Rs 148 cr

·3-min read

Consolidated profit before tax (PBT) surged 64.7% to Rs 212.23 crore in Q3 December 2020 as against Rs 128.86 crore in Q3 December 2019. Current tax expense for the quarter jumped 24.1% to Rs 30.71 crore as against Rs 24.74 crore in Q3 December 2019. The Q3 result was declared on Saturday, 23 January 2021.

Consolidated Q3 PAT improved on the back of a 3.2% growth in sales by volume, aggressive cost rationalization and higher sales of premium products. Consolidated EBITDA jumped 19.4% to Rs 375.94 crore in Q3 FY21 over Rs 314.94 crore in Q3 FY20. Cash profit spurted 39.5% to Rs 302.99 crore in Q3 December 2020 as against Rs 217.22 crore in Q3 December 2019.

Realization per tonne remained almost flat during the quarter at Rs 4,739 as compared to Rs 4,712 in Q3 FY20. EBITDA per tonne rose 16.7% to Rs 992 in Q3 December 2020 as against Rs 850 in Q3 December 2019. Its capacity utilization for the December quarter was one of the highest in the industry. Sales by volume for the December quarter rose 3.2% to 3.55 million tons (mt), boosting capacity utilization to 92% from 88% in the same period last year. Its capacity utilization for the December quarter was one of the highest in the industry.

In Q3 FY21, Birla Corporation witnessed an increase in raw material, power and fuel costs. Cement prices remained relatively weaker in the quarter compared to the preceding three months and together they led to softening of EBITDA per ton on a sequential basis. Yet, EBITDA per ton for the December quarter grew 16.7% year-on-year (Y-o-Y) aided by higher volumes, improved operating efficiencies and cost rationalization.

Even amid operating cost pressure, Birla Corporation continued to reduce overall costs, largely by scaling back discretionary spending and interest expenditure. The company pared its overall borrowing cost to 7.82% for the December quarter, recording a 104 basis points fall from the same period last year. Its total debt at the end of December 2020 stood at Rs 4,099 crore as compared to Rs 4,172 crore a year earlier, despite having drawn down Rs 732 crore on account of the Mukutban project.

Among projects, Birla Corporation is expanding production capacity at multiple locations with the aim of scaling it up to 25 million tonnes (MT) by 2025. Construction of the company's 3.9 million cement plant at Mukutban in Maharashtra is progressing satisfactorily and the unit is expected to be commissioned in the third quarter of the next fiscal year. The company is planning to hook up incremental clinker capacity at Chanderia in Rajasthan in the first quarter ofthe next fiscal year.

Birla Corporation has already launched multiple initiatives to create awareness about MP Birla Cement and build a robust distribution network for the upcoming Mukutban unit in Maharashtra and Telengana. Initial response from potential trade partners has been very encouraging. The company's expansion plans for Kundanganj. which were put on hold in view of uncertainties over cement demand, have been revived. In mid-January, Birla Corporation broke ground on the new plant, which is expected to be ready in the first quarter of FY 22-23.

Shares of Birla Corporation rose 0.37% to Rs 722.80. Birla Corporation is primarily engaged in the manufacturing of cement as its core business activity. It has significant presence in the jute goods industry as well.