Birla Corporation net profit down by 56 per cent

Birla Corporation, the flagship company of M P Birla group, and cement major, announced its third quarter results on Saturday. The company has achieved cement production of 19.63 lakh tons this quarter compared to 18.05 lakh tones for the same period last year, an increase of 8.75 per cent year on year (YoY). 

On financial front, the net revenue from operations of Birla Corp. reached Rs 807 crores in Q3FY16 compared to Rs 757 crores in Q3FY15, an increase of 6.64 per cent YoY. The EBITDA stands at Rs 58 crores this quarter compared to Rs 40 crores in Q3FY15, an increase of 45.10 per cent YoY. The EBITDA margin stands at 7.14 per cent this quarter compared to 5.25 per cent in Q3FY15. The substantial increase in EBITDA is attributed to slow increase in other expenses which saw an increment of just 2.72 per cent YoY to Rs 335 crores this quarter, compared to Rs 326 crores for the same period last year. 

The net profit stands at Rs 6.57 crores in Q3FY16 compared to Rs 15 crores in Q3FY15, a decrease of 56.20 per cent YoY. The decrease in net profit is because of an exceptional loss of Rs 9.29 crores this quarter. Profit was also impacted in the wake of cement prices touching the lowest levels in the past three years within the markets that the company is operational in.

The nine month ending net revenue from operations increased by 25 per cent and reached Rs 2408 crores compared to Rs 3210 crores for the same period last year. The net profit for nine month period stands at Rs 42 crores compared to Rs 175 crores, a decrease of 76 per cent for the same period last year. The company has achieved cement production of 58.81 lakh tons in this nine month period compared to 57.60 lakh tones during the same period last year, substantially an increase of 2.10 per cent. 

This quarter the company has initiated various cost reduction measures and could optimize on various variable costs, including higher use of pet coke instead of coal at Satna; higher use of fly ash and slag; and purchase of power from the exchanges, at rates lower than the grid. Further, steps have been taken to reduce power consumption at all units. The stock of the company is trading at Rs 407 an increase of 3.43 per cent from previous close.