Birla Corp net profit down 55.45% in Q4, blames high fuel prices

Company says it has 'healthy growth in sales by volume in almost every segment and market'.

Birla Corporation, the flagship firm of the M P Birla group, reported a 55.45 per cent drop in net profit to Rs 111.08 crore in the March quarter due to a one-off credit adjustment in income tax expense the previous year. The company’s net profit in the year-ago period stood at Rs 249.33 crore.

The company attributed the drop in net profit to a one-off credit adjustment of Rs 124.98 crore in income tax expense in the previous year. Profit before tax was lower by 14.79 per cent at Rs 153.18 crore.

The fall in profit was in spite of an 8.7 per cent increase in revenues at Rs 2,333.54 crore. The company said profitability is under pressure because of the high fuel costs that it could not pass on to consumers.

“Despite healthy growth in sales by volume in almost every segment and market, Birla Corporation’s profitability was hugely impaired by at least 40 per cent increase in fuel cost and 8 per cent increase in cost of delivery,” the company said.

The company clocked in its highest ever sales in the three months till March 31 and for the full year. Sales for the full year at 14.22 million tonnes (mt) was higher by 6.2 per cent over the previous year. The previous highest of 13.65 mt was achieved prior to the pandemic in FY2018-19.The company however said that the spurt in sales came mostly towards the end of the financial year.

“Despite achieving the highest ever production at three of our units—Satna, Maihar and Chanderia—and record sales in five states, our profitability took a hit because of excessive rise in fuel and freight costs, which could not be passed on to consumers,” said Harsh Lodha, chairman of M P Birla Group.

“The tide has, however, started to turn from March, and we are hopeful that in the current financial year, our company will reach new heights. The Mukutban unit which has commenced production at the end of April will add a lot of heft to our cement business in the near future,” he added