MOSL: BIRLA CORPORATION (Buy)-In-line performance in both standalone and consolidated operations
​Birla Corporation: In-line performance in both standalone and consolidated operations
(BCORP IN, Mkt Cap USD1.0b, CMP INR925, TP INR1150, 24% Upside, Buy)
- Muted standalone volume growth: Standalone volumes fell 1% YoY to 2.14mt (est. of 2.20mt) due to weak demand in UP on account of sand shortage. Reliance Cement reported volume of 1.14mt in 1QFY18, operating at ~81% utilization v/s 67% in FY17. Standalone realizations increased 7% QoQ to INR4,819/t due to price hikes in the focus markets of east and central India.
- Standalone operations witness margin improvement QoQ: The sequential margin improvement in standalone operations is largely led by realization increase of 7% QoQ, partially negated by cost push (+4% QoQ). Power & fuel cost/t rose 14% QoQ due to higher petcoke prices. Freight cost/t increased 8% QoQ due to overloading restriction in its focus markets. Adj. PAT stood at INR403m (v/s reported PAT of INR278m), as there was exceptional item of INR120m (entry tax in WB related to earlier years).
- Reliance Cement reports EBITDA/t of INR1,200: Acquired subsidiary Reliance Cement posted EBITDA of INR1,200/t for 1QFY18 v/s INR1,135/t in FY17. The subsidiary has operated at 81% utilization in 1QFY18, with the Maihar unit operating at ~95% utilization. Utilization for the other units was impacted by weak demand in the core markets of UP.
Birla is engaged in the manufacture and sale of cement in India. Co.'s Cement division offers various cements, such as ordinary portland cement, 43 and 53 grades, portland pozzolana cement, fly ash – based PPC, low alkali portland cement, portland slag cement, low heat cement, and sulphate resistant cement. Its Jute division provides a range of products, including jute yarn, floor and wall covering, lino hessian, decorative fabrics, nursery cloth, scrim, jute carpets, non-woven jute felt, hydrocarbon-free bags/cloth, D.W. canvas, carpet backing cloth, hessian cloth/bags, and sacking bags/cloth.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.