Buy Birla Corporation Ltd for the Target Rs. 1,650 by Choice Institutional Equities
* Outlook: We reiterate our BUY on BCORP with a revised TP of INR 1,650 (vs. INR 1,620), keeping our volume, realization, EBITDA/t, and EBITDA assumptions unchanged. Our positive stance is supported by sector tailwinds (6–8% demand growth, healthy pricing) and company-specific drivers: (1) 7.5 MTPA capacity expansion to 27.5 MTPA by FY29, (2) higher blended cement share, (3) growing premium products & trade sales to boost realizations, and (4) ~INR 200/t opex savings over the next two years. These factors drive RoCE (ex-CWIP) expansion by 709 bps to 13.3% in FY28E from 6.2% in FY25.
* We forecast BCORP EBITDA to grow at a CAGR of 24.0% over FY25-28E based on our volume growth assumptions of 6%/7%/7%, and realisation growth of 4.0%/1.5%/0.0% in FY26E/27E/28E, respectively.
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