Birla Corporation posts record cement sales and 127% profit growth in Q4 amid market challenges

Birla Corporation Limited has wrapped up fiscal 2023-24 on a high note, with record cement sales and a 127.1% increase in consolidated net profit during the March quarter. Despite weak market conditions, the company’s Cement Division achieved a capacity utilization rate of 97% following the successful ramp-up of the Mukutban unit. Consolidated net profit for Q4 was Rs 193 crore, up from Rs 85 crore last year. This impressive growth came amid moderating power and fuel costs.

Investment in Capacity Expansion

RCCPL Private Limited, a wholly-owned subsidiary of Birla Corporation, has approved an investment of Rs 425 crore to increase capacity at its Kundanganj unit by 1.4 million tons within two years. One-third of this investment will come from internal accruals.

Growth Targets and Market Expansion

In light of India’s growing cement consumption, Birla Corporation is embarking on its next phase of expansion to reach 25 million tons of annual cement production by fiscal 2026-27.

Birla Corporation Limited achieves record cement sales and 127% net profit growth in Q4 amid challenging market conditions.

Market Challenges and Price Pressure

While the company saw growth in Q4 revenue to Rs 2,682 crore (up 6.8% from last year), it faced significant price pressure. Realization from cement fell by 1.6% to Rs 5,178 per ton amid declining prices due to weak demand and disruptions such as Assembly elections. The company’s EBITDA per ton for the Cement Division rose 56.7% to Rs 964, reflecting significant gains despite these challenges.

Operational Efficiency Boosts Profits

Birla Corporation attributed its success to improvements in power and fuel costs, which fell by 27% in Q4 and 23.8% for the full year. Additionally, the company increased its reliance on renewable power, accounting for over 24% of its energy use in the fiscal year.

Despite challenging market conditions, Birla Corporation’s strategic investments in operational efficiency and capacity expansion have yielded positive results. The company’s focus on renewable energy and reducing production costs will likely continue to strengthen its competitive advantage in the coming years.