Birla Corporation, the flagship company of the MP Birla Group, is holding steady with its guidance for the financial year 2024, aiming for a 15% growth in volumes and an EBITDA (earnings before interest, tax, depreciation, and amortisation) per tonne of around ₹850.

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Last week, the company reported a jump of over 12% in its second-quarter standalone net sales to ₹1,417.66 crore from ₹1,262.78 crore in September 2022. Net profit rose to ₹47 crore from ₹17 crore in September 2022. Its EBITDA came in at ₹150.85 crore versus ₹43.52 crore in September 2022.

In a chat with CNBC-TV18, CFO Aditya Saraogi explained that while average EBITDA per tonne in the first half of the year was subdued at around ₹700, the company expects an upturn in the second half, driven by higher volumes and slightly better realisation.

Key to this improvement will be the performance of the Mukutban plant in Maharashtra, which is exceeding volume expectations and will benefit from additional incentives in the fourth quarter.

Saraogi said the Mukutban project is surpassing expectations in both cost management and volume production. "We are likely to achieve our annual target of two lakh tonnes even faster than planned," Saraogi remarked. The rapidly decreasing costs at the plant, coupled with the incentives, are set to make a significant contribution to the company's fourth-quarter performance.

The company's Mukutban plant is eligible for fiscal incentives for 20 years, which is expected to be received in the second half of the current financial year.

On the pricing front, the company implemented an average increase of about 3% in October. While no immediate further increases are planned, additional hikes may occur towards the end of the third quarter and the beginning of the fourth quarter.

Birla Corporation has a debt of ₹3,550 crore as of September and expects to keep the Net Debt to EBITDA ratio within a sustainable 3x level.

Currently, the company is not pursuing new acquisitions, choosing to focus on maximizing the potential of its existing assets, including its six plants located in Maihar, Satna, Kundangunj, Raebareli, Chanderia, and Mukutban.

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The Kolkata-based company has a market capitalisation of ₹9,812 crore. Shares of the company were trading at ₹1,299 apiece, up nearly 2% on the NSE on November 17. The shares have gained around 1% over the last month versus marginal losses in the benchmark Nifty 50.

(Edited by : Shweta Mungre)

First Published:Nov 17, 2023 2:17 PM IST