Birla Corp's net profit falls by 43% in Q2

M.P. Birla Group's flagship company Birla Corporation (BCL) on Wednesday posted a decline of 43% in net profits at Rs.18.48 crore for the quarter ended September 30 this fiscal year.

The same in the similar quarter of the last fiscal year stood at Rs.32.46 crore.

Its net revenue increased by 4.5% at Rs.801.78 crore in the quarter under review as against Rs.767.11 crore in the July-September timeframe of 2014.

Expenses also increased by three% at Rs.788.83 crore when compared to Rs.766.16 crore in the second quarter of 2014-15.

Its cement business was hit hard in the quarter as profitability fell by 70% at Rs.14.19 crore while revenue remained flat at Rs.713.43 crore. The same in the July-September months of the last fiscal year stood at Rs.47.39 crore and 719.45 crore.

Its jute business, however, registered a 90% increase in its revenue at Rs.85.06 crore as against Rs.44.77 crore in the second quarter of 2014-15 while it made a profit of Rs.7.20 crore as compared to the loss of Rs.2.43 crore in the corresponding period of 2014.

The M.P. Birla Group, in August this year, had stated to be acquiring the cement business of Lafarge India for Rs.5,000 crore through a combination of internal accruals and fresh debt to add another 5.5 million tonnes in annual capacity.

Under this transaction, BCL and its subsidiaries will acquire the integrated cement unit of Lafarge India at Sonadih (Chhattisgarh) and a cement grinding unit at Jojobera (Jharkhand) along with Concreto and PSC brands and the management team.

These units have a cement capacity of 5.15 million tonnes per annum (mtpa), with mineral rights over adequate reserves of limestone.