Birla Corporation fell 6.93% to Rs 607.80 after consolidated net profit tanked 53.2% to Rs 65.77 crore on 35.1% decline in net sales to Rs 1,221.97 crore in Q1 June 2020 over Q1 June 2019.
Consolidated profit before tax (PBT) slumped 61.4% to Rs 84.52 crore in Q1 June 2020 over Q1 June 2019. Current tax expense for the quarter tumbled 83.7% at Rs 7.31 crore as against Rs 44.71 crore paid in Q1 June 2019. The Q1 result was declared after trading hours on Friday, 7 August 2020.
Revenue for the quarter declined as sales by volume dropped 33.9% to 2.4 million tons (mt). EBITDA slumped 37% to Rs 252 crore in June 2020 as against Rs 402 crore in June 2019 amid severe disruptions in key markets and manufacturing centres due to the Covid-19 pandemic.
The company said that operations of its plants stood suspended for nearly the entire month of April. Sales during this period were also negligible. Though things started to move in May, it was only in the latter half of the month that operations normalised. With production across most plants gaining steam only in the first week of May, around seven of 13 weeks were available during the quarter. However, local lockdowns and restrictions continued to hobble operations. Although it took longer than expected to restart operations, all teams mobilised for rapid ramp-up to deliver a high run-rate in the latter part of May and June. This partially compensated for the loss of volumes and earnings in the six weeks of the quarter, although sporadic disruptions in isolated pockets in core markets continued.
"With the arrival of monsoons, cement prices have started to weaken in key markets from the end of June. Timely arrival of monsoons, however, augurs well for recovery of India's economy. While demand during rest of the year will be a function of how the lockdowns in various regions of the country pan out from time to time, expectations of gradual easing of lockdown in urban areas and resurgence in infrastructure activities with migrant workers returning to construction sites are indicative that the worst may be over for the industry. The company remains cautiously optimistic about a gradual return to normalcy over the next few months," it added.
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.
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