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Premiumization continues

Operating performance along expected lines

Birla Corporation (BCORP IN) net sales grew ~8% YoY and ~15% QoQ to ~INR 26bn. EBITDA increased ~72% YoY and ~25% QoQ to ~INR 4.7bn. Net sales and EBITDA were largely in line with our estimates of ~INR 26.0bn and ~INR 4.8bn, respectively. Adjusted PAT surged ~161% YoY and ~73% QoQ to ~INR 1.9bn.

Cement EBITDA per tonne up ~57% YoY and ~7% QoQ

Cement sales volume improved ~9% YoY and ~15% QoQ to 4.85mn tonne, due to ramp-up of the Maharashtra plant. Cement realization dipped ~2% YoY and QoQ each to INR 5,178/tonne. Realization fall for BCORP was lower than other cement firms as it was sold out at some of its plants and increased premiumization. Blended operating cost fell ~9% YoY and ~2% QoQ to INR 4,503/tonne. The rising share of green power, lower fuel prices, coupled with savings from increased operational efficiency under the Project Shikhar and Project Unnati, were key cost-saving triggers. As per management, BCORP achieved gross cost savings of INR 660mn and INR 1bn, respectively, through Project Shikhar and Project Unnati in FY24. Cement EBITDA/tonne rose ~57% YoY and ~7% QoQ to INR 964

Announces new expansion project of 1.4mn tonne

In line with its vison to reach 25mn tonne by FY27, BCORP has announced a Brownfield expansion of 1.4mn tonne grinding capacity at its Kundanganj unit in Uttar Pradesh. Total capex for the project will be ~INR 4.25bn and capacity is likely to be operational within two years.

Valuation: reiterate Accumulate with a higher TP of INR 1,824

We believe further ramp-up of Maharashtra-based Mukutban operations bodes well for near-term volume growth whereas gradual completion of ongoing growth capex is likely to support volume growth. Also, lower fuel prices, rise in share of renewables power, increased production from captive coal mines and other cost savings initiatives bode well for margin. Thus, we reiterate Accumulate. We increase our EBITDA ~1% each for FY25E and FY26E and rollover to March 2026E from December 2025E. Thus, we increase our TP to INR 1,824 from INR 1,740 based on 8x (unchanged) March 2026E EV/EBITDA.

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