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Business EconomyPosted at: Feb 4 2023 7:38PM


Birla Corporation’s December quarter revenue up 9 pc

Kolkata, Feb 4 (UNI) Birla Corporation Limited’s December quarter consolidated revenue grew 9 per cent year-on-year to Rs 1,911 crore but profitability was impaired by high fuel costs.
Total revenue at Rs 2,024 crore was up 15 percent over the previous year, which includes sales from the Mukutban unit (of the Company’s subsidiary, RCCPL) which started commercial operations in the current financial year. Consolidated cement sales by volume for the quarter were up 11 percent year-on-year at 3.72 million tons, according to a media statement here on Saturday.

Production cost of cement for the December quarter was 12 percent higher than the same period last year owing primarily to power and fuel resulting in lower cash profit on a comparable basis, which was down 32 percent from last year at Rs 115 crore. Although progress with the Mukutban project has been ahead of plans and its adverse impact on the bottomline has been contained at a level substantially lower than the original budget, extra-ordinary cost pressure on the cement industry has pulled down overall financial performance. This has resulted in a net loss of Rs 50 crore for the December quarter, against a net profit of Rs 60 crore in the same period last year.

To mitigate the cost pressure, the company has optimized its fuel consumption mix, the full benefits of which are to be realized only in the March quarter. Fuel prices have started to climb down. pet coke prices have fallen by about 12.5 percent from the end of September and domestic coal prices have corrected by about 20 per cent during the same period. Combined with change in consumption mix, fuel cost during the December quarter has gone down 2.6 percent sequentially.

Further correction is expected in fuel prices, which, in turn, will improve the Company’s profitability. For further rationalization of costs, Birla Corporation Limited is looking to scale up production of coal from its own mines.
The Company’s subsidiary, RCCPL, has received necessary clearances in January to raise production at its Sial Ghoghri mine from 300,000 tons per annum to 375,000 tons per annum. Production at the Company’s Bikram coal mine is expected to start in the second quarter of the next fiscal year.

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