 "Birla Corporation")
M P Birla group flagship, Birla Corporation, recorded a net profit of Rs 58.37 crore in the July to September quarter (Q2FY24) on a consolidated basis compared to a net loss of Rs 56.46 crore in the year-ago period.
The company attributed the jump in profitability to the ramp-up of Mukutban operations, cost initiatives, premiumisation, and optimization of power and fuel mix, and softening fuel prices.
Revenue from the cement business increased 16.17 per cent year-on-year (y-o-y) to Rs 2,178.32 crore in the September quarter; revenue from the jute business saw a 13.23 per cent y-o-y drop to Rs 107.60 crore.
Total income on a consolidated basis in the September quarter was at Rs 2,313.23 crore, an increase of 13.3 per cent compared to the same period last year. In the previous quarter, total income had stood at Rs 2,424.63 crore and net profit at Rs 59.71 crore.
Commenting, Harsh V Lodha, chairman, said that the company 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 had been progressing as per plan, he added. “We are well on track to meet our targets in the near term.”
The company also said that the board of subsidiary, RCCPL Pvt Limited, on November 6, approved a plan to set up a 1.4 million tonne greenfield grinding unit at Prayagraj in Uttar Pradesh. The estimated cost of the project is around Rs 400 crore.
This would substantially enhance the company’s servicing capabilities to its core markets of “Purvanchal” (eastern Uttar Pradesh), it said. The unit is expected to start production by Q2 of 2025.
The unit will be eligible for tax incentives of the Uttar Pradesh Government, which, along with savings in logistics and fly ash costs, will add substantially to profitability, the company said.
On the outlook for cement, the company said that it expects the price situation to remain stable during the December quarter. Demand in its key markets of Madhya Pradesh and Rajasthan may be impaired by state elections.
“However, we expect the momentum to be maintained by central government spends on infrastructure and welfare projects as well as the buoyant housing sector,” it said.
The jute business was impacted by poor overseas demand for value-added products. And the company expects demand for jute and jute products to remain subdued for some more time.
