Kolkata, November 8, 2023 – Birla Corporation Limited demonstrated robust profitability for the September quarter of 2023, despite seasonal challenges, attributed to the successful ramp-up of their Mukutban operations, strategic cost initiatives, premiumization, and optimization of power and fuel resources. These achievements were further bolstered by a favorable trend in fuel prices.
The company reported a substantial increase in its consolidated cash profit for the Q2 quarter, reaching Rs 221 crore, marking a remarkable 414 percent rise compared to the previous year. In the same period, the net profit stood at Rs 58 crore, a noteworthy turnaround from a net loss of Rs 56 crore during the corresponding period in the previous year.
For the first six months of 2023, Birla Corporation recorded a consolidated net profit of Rs 118 crore, a substantial surge compared to Rs 5 crore in the same period the previous year.
Chairman Harsh V. Lodha expressed his satisfaction with the company’s performance, noting, “The Company has recorded steady progress in the last three quarters, recovering from the power and fuel cost shock of 2022, triggered by the Ukraine crisis. The results were achieved despite cement prices remaining flat and many of our core markets affected by heavy rains and other seasonal factors. This vindicates our strategy and initiatives on multiple fronts. The ramp-up of Mukutban operations has been progressing as per plan notwithstanding the tepid market conditions in the region. We are well on track to meet our targets in the near term.”
In terms of financials, Birla Corporation’s consolidated revenue for the September quarter reached Rs 2,313 crore, reflecting a 13.3 percent year-on-year increase. The realization per ton during the quarter was Rs 5,062, with a marginal decrease both sequentially and year-on-year due to soft pricing situations in various markets. Nevertheless, sales by volume surged by 14.8 percent to 4.18 million tons (mt) in the September quarter, compared to 3.64 mt during the same period the previous year.
The company’s capacity utilization increased to 83 percent (compared to 74 percent the previous year) for the first six months until the end of September, and it reached 87 percent (as opposed to 81 percent last year) primarily due to the scaling up of production at Mukutban, a unit of the company’s subsidiary, RCCPL Pvt. Limited.
Moreover, the Board of the company’s subsidiary, RCCPL Pvt. Limited, recently approved a plan to establish a 1.4 million-ton greenfield grinding unit in Prayagraj, Uttar Pradesh, with an estimated cost of around Rs 400 crore. This strategic move is set to enhance the company’s servicing capabilities in its core markets in Eastern Uttar Pradesh. Construction can commence shortly upon receiving necessary clearances, and the unit is projected to commence production by Q2 of 2025. The new unit is expected to provide tax incentives from the Uttar Pradesh Government and cost savings in logistics and fly ash expenses, significantly boosting profitability.