Birla Corp shares see best day in 5 years as stock rallies 20%; here's why

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Shares of Birla Corporation were locked in a 20 per cent upper circuit on Monday after it reported a 32.72 per cent year-on-year (Y-o-Y) rise in consolidated net profit in the January–March quarter (Q4FY25). 

 

Birla Corp.'s stock rose as much as 20 per cent during the day to an upper circuit of ₹1,268.8 per share, the biggest intraday gain since May 26, 2020. This compares to a 3 per cent rise in the benchmark Nifty50 as of 12:15 PM. The stock trades at the highest level since December last year. 

 

From its recent lows of ₹910, which it hit in early March, the counter has recovered by nearly 40 per cent. The stock has advanced 2 per cent this year, compared to a 4.25 per cent rise in the benchmark Nifty 50. Birla Corp. has a total market capitalisation of ₹9,781.60 crore. 

 

Birla Corp Q4FY25 analysis

 

The M P Birla Group's flagship company recorded a 32.72 per cent Y-o-Y rise in consolidated net profit to ₹256.61 crore in Q4FY25. In the year-ago period, net profit had stood at ₹193.34 crore.

 

Consolidated revenue in Q4FY25 stood at ₹2,863.14 crore, up 6.8 per cent from ₹2,680.13 crore in the same period last year. In Q3FY24, revenue was ₹2,272.07 crore.

 

Despite a sharp increase in profit during the March quarter, consolidated revenue for FY25 stood at ₹9,312.40 crore, down 4.4 per cent. Consolidated net profit for the full year was ₹295.22 crore, down 29.8 per cent.

 

Cement sales by volume during Q4FY25 grew 8 per cent Y-o-Y to 5.2 million tonnes (mt). For the full year, the company sold 18.1 mt of cement, compared to 17.6 mt in the previous year—an increase of 2.5 per cent. 

 

Birla Corp management commentary 

 

The company attributed the growth to “robust” quarterly production and sales by volume. “This came after three challenging quarters that had affected the entire industry. An uptick in demand and prices during the quarter led to better realisation and a higher capacity utilisation of 105 per cent in the March quarter,” it said in a statement.

 

Commenting on the developments, Harsh V Lodha, chairman, said, “Our capacity utilisation in central and eastern India is more than 100 per cent. We expect cement demand to grow at a CAGR of 6–7 per cent over the next few years.”

 

“To improve our leadership position in high-growth markets, we are ready for the next phase of growth. The addition of fresh capacity will have a favourable impact on profitability and will reduce lead distances, with grinding units located closer to the market,” he added.