Birla Corporation, a flagship of the MP Birla Group, has seen an over 200 per cent jump in consolidated net profit to ₹81.5 crore (approx) for the quarter-ended December 2019.
The net profit in the corresponding quarter last fiscal was ₹27 crore.
The profit came primarily on account of higher capacity utilisation (at 87 per cent) and a push in sales of premium cement.
Despite a muted demand scenario, the company’s consolidated revenue from operations rose 10 per cent to ₹1,715 crore against ₹1,557 crore the year-ago-period.
According to Sandip Ghose, Chief Operating Officer, Birla Corporation, the cement demand is already showing signs of revival with infrastructure projects being kick-started and liquidity in the rural sector improving (following good harvest in large parts of North India).
“Going forward, we expect this momentum to pick-up as cascading effect of government investment (especially rural infrastructure and highways) will flow into the hinterland and efforts by the Centre to boost the demand side of the economy start yielding results,” Ghose added.
Focus on premium
Sale of premium cement by volume saw a 17 per cent year-on-year growth in the quarter under review. The share of premium cement in sales (by volume) through trade channels increased to 41 per cent (37 per cent).
Share of blended cement in total sales jumped to 90.5 per cent (89 per cent).
“Our strategy to concentrate on the trade segment, blended cement and premiumisation, while aggressively pushing down costs, is well-aligned with the projected scenario,” Ghose added.
Though prices remained weak in key markets in the December quarter, the company was able to garner increased market share in West Bengal and Bihar by expanding its distribution reach and leveraging cross-branding from multiple plants.