Birla Corporation Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Birla Corpn. reported a resilient Q2 FY26, maintaining strong EBITDA per tonne despite subdued prices in the central region and a temporary operational setback at Maihar. The company's strategic focus on premium products and the trade segment helped mitigate broader market pressures. Management anticipates a stronger second half, with the Kundangunj plant nearing commissioning and a positive outlook for cement demand revival.

Highlights

  • EBITDA per tonne remained strong at INR712 for Q2 and INR714 for H1, despite market headwinds.

  • Mukutban volume showed robust 20% YoY growth, reaching 6 lakh tons in Q2 FY26.

  • Company's strategy of focusing on the trade segment and premium products insulated profitability from market pressures.

  • The second half of FY26 is expected to outperform the first half.

  • Kundangunj plant is on track for commencement by end of Q3 or beginning of Q4 FY26.

Concerns

  • Prices in the central region remained subdued, impacting overall realization.

  • A breakdown at the Maihar unit in Q1 had an overhang into Q2, necessitating purchase clinker and denting profitability by INR20-25 crores.

  • GST changes led to a significant price slide in the non-trade sector, though Birla Corpn.'s exposure is limited.

  • Heavy unseasonal rains in key markets acted as a dampener on demand.

Key financials

3 periods

Headline

  • Net Debt
    ₹2,450 Cr

Q2

  • EBITDA per tonne
    ₹712
  • Mukutban Volume
    6,00,000 tons
    YoY +20%
  • Incentive Accrued
    ₹18 Cr
  • Lead Distance
    340 kilometers
  • Kcal Cost
    ₹1.48

H1

  • EBITDA per tonne
    ₹714

What they filed

Q1 FY27: revenue up 7.8%, net profit down 3.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,953 2,257 2,815 2,454 2,207 +13%2,159 −4%2,836 +1%2,646 +8%
EBITDA177 248 534 347 305 +72%293 +18%510 −4%342 −1%
Net profit-25 31 257 120 90 +460%53 +71%295 +15%116 −3%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹800 Cr Cut — Management typically spends lower than initial guidance, and this is sustainable capex, not expansion.
    • Kundangunj plant commencement
    • Maihar expansion

    Previously planned ₹1,000 Cr

    Aditya Saraogi: "capex for the entire year, we expect to be around INR800 crores." Rajesh Kumar Ravi: "Understood. And sir, on the expansion plan, you have lowered the capex outgo guidance from INR1,200-odd crores to INR800 crores, so could you just share what is your plan or what is your..." Sandip Ghose: "This is the sustainable capex -- sustaining capex this is not really expansion..."
  • Debt Net ₹2,450 Cr
    Aditya Saraogi: "About INR2,450 crores."

Guidance & targets

Profitability

  • H2 Performance Profitability · H2 FY26 · Medium confidence Better than H1
    So definitely, in this year also, we don't expect any exception. We expect the second half to be better than the first half of the year.

    — Sandip Ghose

Capacity

  • Kundangunj Commencement Capacity · End of Q3 FY26 / Beginning of Q4 FY26 · High confidence Commence operations
    We are expecting Kundangunj to commence by the end of third quarter, beginning of fourth quarter.

    — Aditya Saraogi

Volume

  • Cement Demand Volume Growth Volume · 3 months ending December (Q3 FY26) · High confidence 4-5% YoY
    management expects cement demand to revive in the 3 months ending December, led by government capex translating into a Y-o-Y volume growth of 4% to 5%. So this is what we can work out our number in terms of what you are anticipating. So we are on track even after taking into account how October has been -- we have factored in the month of October with this comment? Yes. Saket, we made the declaration on Friday. So obviously, we have taken that into account. There should not be any change. It's as recent as that.

    — Sandip Ghose

Capex

  • FY26 Capex Capex · FY26 · High confidence INR800 crores

    Previously INR1,000-1,200 crores → INR800 crores

    capex for the entire year, we expect to be around INR800 crores.

    — Aditya Saraogi

Sustainability

  • Renewable Energy Share Sustainability · H2 FY26 · Medium confidence 32%
    Sir, my next question is regarding the increase of share of renewable energy to 32% in the second half. So what is -- what -- could you quantify the cost savings?

    — Anup Lal (question), Sandip Ghose (response)

Cost Reduction

  • Captive Coal Production (Bikram) Cost Reduction · Next financial year (FY27) · High confidence Meaningful production
    So meaningfully from next financial year, we will start getting the production from Bikram Coal Mine.

    — Aditya Saraogi

What to watch in Q3 FY26

H2 FY26 Performance

H2 FY26
Current H1 performance reported
Target Better than H1

Why it matters

Management expects the second half to outperform the first, indicating potential for improved profitability and volumes.

So definitely, in this year also, we don't expect any exception. We expect the second half to be better than the first half of the year.

Risks & concerns

  • Subdued prices in the central region

    medium

    Prices in the central region remained the most subdued compared to other regions, impacting profitability.

    Management acknowledged

  • Impact of Maihar unit breakdown

    medium

    Breakdown at the Maihar unit in Q1 had an overhang into Q2, requiring purchase clinker and denting profitability by INR20-25 crores.

    Management acknowledged

  • GST changes affecting non-trade sector pricing

    medium

    GST changes led to a significant price slide in the non-trade sector, though the company's exposure to this segment is limited to less than 15% of volumes.

    Management acknowledged

  • Heavy unseasonal rains impacting demand

    low

    Unseasonal rains in key markets acted as a dampener on demand, but considered a temporary aberration.

    Management acknowledged

Q&A highlights

3 direct, 1 evasive
Impact of clinker purchase and price outlook Partial
We can't share the specific numbers there, but I think you can make a rough guess. It would have it's not very large, but... INR20 crores, INR25 crores...

Analysts sought quantification of specific cost impacts and forward pricing guidance, which management partially provided for costs but remained vague on pricing.

Asked by Shravan Shah

EBITDA per tonne trajectory for H2 FY26 Evasive
We won't commit on numbers, Shravan, you've been with us for a long time. And prices really speaking, as we said, I think it will have to be led by the non-trade segment and without that recovering and that we are not really major players. So we are looking up to what the market does.

Analysts pressed for specific EBITDA/tonne guidance for the upcoming quarters, but management declined to provide a number due to market uncertainties.

Asked by Saket Kapoor

Backward integration and captive coal output ramp-up Partial
Yes, already the Sial Ghogri is going on. And for the Bikram, already the activities are on. We expect that during the end of this financial year, we'll start some activity and maybe you can touch the coal production also. So meaningfully from next financial year, we will start getting the production from Bikram Coal Mine.

Analyst inquired about the timeline for captive coal production, a key cost-saving initiative, with management providing a phased timeline.

Asked by Saket Kapoor

Impact of GST rate cut on incentive accrual Direct
Largely, we are not expecting any major change. In some states like Rajasthan and all, it might come down. But that is about maybe INR10-odd crores. ... So in absolute terms, we can claim the GST, we claim that. So therefore, there is no actual loss on that.

Clarification on the financial impact of recent GST changes on incentives, indicating minimal net loss due to existing caps.

Asked by Rajesh Kumar Ravi

Maihar expansion progress and central region capacity beyond Kundangunj Partial
Rajesh, on that, we are maintaining our earlier guidance. You can take our earlier guidance, we are maintaining that guidance in terms of capacity expansion.

Analyst sought updates on specific capacity expansion projects, but management referred to previous guidance without providing new details.

Asked by Rajesh Kumar Ravi

Strategy and expansion plans for the RMC business Direct
RMC business, as we said, we are still on a we are progressing steadily and slowly. We don't want we are in no rush to expand and then burn our hands and feet and all that, which many people have done. ... So that is the route we are taking. And therefore, we want to move forward systematically, making a combination of the market opportunity plus our brand synergy there.

Management articulated a cautious, brand-synergy-focused strategy for RMC expansion, prioritizing profitability over aggressive volume growth.

Asked by Uttam Kumar Srimal

Efficiency of existing plants and upgrade plans Direct
I will let Mr. Prusty answer that, but I don't know where you're talking about are we operating lower than efficiency because if you see our capacity utilization, when there is a thing we are operating in all our older plants at peak capacity or higher. Only it is in Mukutban, which is still in the process of reaching the peak capacity.

Analyst questioned plant efficiency, and management clarified that most older plants operate at peak capacity, with Mukutban still ramping up.

Asked by Vipul Shah

2 min read 7 chapters

Detailed narrative

Q2 FY26 Performance Overview

Birla Corpn. reported an EBITDA per tonne of INR712 for Q2 FY26 and INR714 for the first half of the fiscal year. This performance was achieved despite several headwinds, including subdued prices in the central region and a temporary operational setback. The company's strategy of focusing on the trade segment and premium products helped maintain profitability.

Operational Headwinds and Mitigation

The central region experienced the most subdued prices, and heavy unseasonal rains impacted demand. A breakdown at the Maihar unit in Q1 led to an overhang in Q2, requiring the purchase of clinker and impacting profitability by an estimated INR20-25 crores. However, the company's limited exposure (less than 15% of volumes) to the non-trade sector, which was heavily affected by GST changes, helped mitigate broader price declines.

Capacity Expansion and Project Updates

The Kundangunj plant is expected to commence operations by the end of Q3 FY26 or the beginning of Q4 FY26. For captive coal production, activities are ongoing at Sial Ghogri, and meaningful production from the Bikram Coal Mine is anticipated from the next financial year (FY27), contributing to backward integration and cost efficiency.

Capital Expenditure and Debt

The full-year FY26 capital expenditure guidance has been revised downwards to INR800 crores, from an earlier range of INR1,000-1,200 crores. This reflects the company's focus on sustainable capex rather than aggressive expansion. The net debt position of the company stands at INR2,450 crores.

Market Outlook and Demand Revival

Management anticipates a stronger second half of FY26 compared to the first. Cement demand is expected to revive in the three months ending December, with a projected year-on-year volume growth of 4-5%, driven by government capex. The company remains cautiously optimistic about market conditions.

RMC Business Strategy

The Ready-Mix Concrete (RMC) business is progressing steadily and slowly, with a focus on strategic expansion that leverages brand synergy rather than aggressive volume growth. The company aims to expand in markets where its Perfect Plus brand has a strong presence, prioritizing value-added RMC products over vanilla offerings to ensure profitability.

Efficiency and Renewable Energy

Most of the company's older plants are operating at peak capacity and high efficiency, with Mukutban still in the process of reaching its full capacity. Birla Corpn. aims to increase its share of renewable energy to 32% in H2 FY26, primarily through a mix of solar and hybrid sources, contributing to cost savings and environmental goals.

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