Birla Corporation Limited’s September quarter EBITDA and cash profit jumped to a record high thanks to sustained cost rationalization initiatives and a better-than-expected recovery in cement demand in key markets. The company’s net profit for the quarter at Rs 166.62 crore was up 88.6% over the same period last year.
EBITDA for the September quarter at Rs 403.85 crore and cash profit at Rs 327.86 crore represent a growth of 21.7% and 43.2% respectively. They were the highest ever for any quarter in the history of Birla Corporation Limited. Revenue for the quarter at Rs 1,675.41 crore was up 1.7% year-on-year as sales by volume grew 2% to 3.26 million tons.
Even amidst continuing disruptions in the construction sector due to the Covid-19 pandemic, recovery in cement demand in Birla Corporation Limited’s key markets was better than expected. This was largely on account of demand for rural housing and government spending on rural infrastructure. In the three months till 30 September, Birla Corporation Limited managed to shore up its realization per ton by 1.3% to Rs 4,862.
Birla Corporation Limited has continuously focused on cost rationalization and managed to bring down expenses for the September quarter by as much as 4% compared with the same period last year. The company was able to substantially rationalize power, fuel and finance costs, while scaling back discretionary expenditure such as on advertising and marketing.
At the end of September, Birla Corporation Limited’s consolidated cost of borrowing stood at 8.15%, down 168 basis points from a year earlier. (One basis point is one-hundredth of a percentage point.) Interest cost for the September quarter came down sharply from Rs 102.97 crore a year earlier to Rs 75.99 crore. Birla Corporation Limited has pared its indebtedness from Rs 4,172.77 crore a year earlier to Rs 4,060.65 crore at the end of September, despite spending close to Rs 800 crore on the upcoming factory at Mukutban over the past 12 months.
“It is a matter of great satisfaction that the units under RCCPL, which we acquired in 2016, today rank amongst the most efficient and profitable cement plants in the country, making Birla Corporation Limited one of the market leaders in central India,” said Harsh Vardhan Lodha, Chairman, Birla Corporation Limited. “This is the result of sustained efforts put in by our management under the guidance of the company’s board. Over the years, we have taken several steps to make our cement business more efficient, sustainably profitable and more resilient to vagaries of the market. A lot has been achieved, and we have a clear plan charted out on how to make Birla Corporation Limited more competitive. We have also discussed with our board and finalized a plan to scale up our capacity to 25 million tons by 2025.”