Birla Corpn.

Birla Corpn. reported an EBITDA per ton of INR715 for Q1 FY26, which was lower than expected due to an "abnormal loss" from clinker shortage. The company purchased approximately 1 lakh tons of clinker from competitors, which was a "fairly heavy charge" given its own Maihar plant produces clinker at one of the cheapest rates. Additionally, two extended shutdowns at Mukutban and Maihar, initially planned but prolonged by unforeseen issues like heavy rains, impacted operations. The company's fuel cost was 146 Kcal per tonne, and the average lead distance was 342 km.

The company's volume mix in Q1 FY26 stood at 50% in Central India, 21% in the East, 16% in the North, and 13% in the West. Realizations were impacted by lukewarm prices in Central India, unlike the North and East which saw some price increases. Management emphasized a strategy of focusing on "value share" over "volume share" due to limited capacity, aiming to optimize within its limited geography by moving clinker seamlessly between units. The company noted that its overall average realization was affected by the lower peg in Central India and Mukutban regions.

The company reiterated its annual volume growth guidance of 6-7%. While there are no new clinker capacity additions expected before FY27, the Kundanganj new line is slated for commissioning within FY26. The company is also planning to expand its Waste Heat Recovery System (WHRS) capacity by 10 MW, bringing the total to 50 MW, contributing to efficiency improvements. Management stated that current plant utilization is much higher than 90%.

Birla Corpn. spent INR100 crores on capex in Q1 FY26, maintaining its full-year FY26 capex guidance of INR1,000-1,100 crores, which will be allocated to a mix of projects and sustenance capex, including WHRS expansion. The company's current net debt stands at INR2,300 crores, with an expectation to close FY26 below INR3,000 crores. Management highlighted that the company is self-sufficient in clinker and does not expect to purchase any in Q2-Q4 FY26, which should alleviate cost pressures.

The company successfully increased its blended cement proportion to 89% in Q1 FY26, up from 82% sequentially, and trade sales to 78%, up from 72% sequentially. This reflects a strong focus on premium products and robust brand strength. In the Mukutban region, the premium component of sales increased from 40% to 50%, indicating successful market penetration with higher-value products and a focus on operating in the 'cream' of the market.

The jute segment is undergoing modernization, with efforts to improve efficiency and reduce dependence on government orders. The company is focusing on increasing non-government orders and expanding exports, aiming to be "best-in-class" in the industry. Management noted that while raw jute prices are rising, the company is sharpening its buying practices to mitigate impact and is working on a whole host of things to improve the business.