Birla Corporation Limited

Birla Corporation Limited reported mixed results for Q3 FY26, with a conscious strategy to focus on the trade segment and blended cement. This approach led to an increase in the percentage of trade sales, blended cement, and premium cement, with premium product volume reaching 63%. The company emphasized maximizing capacity utilization and maintaining a lead distance of 328 kilometers, which is better than many larger players. Despite a 99% growth in non-trade in Bihar, the company chose to sell its material in the trade segment.

The company achieved higher realizations compared to peers by maintaining steady premium prices, with the delta between premium and popular brands increasing from INR30 to INR40 in some markets. However, overall profitability was affected by depressed prices in the Central region and Maharashtra. On the cost front, the company reported a quarter-on-quarter cost reduction of INR200, contributing to an EBITDA increase of INR160. Fuel cost for Q3 FY26 was around INR1.47 per 1,000 kilo, down from INR1.5 in Q2, with a fuel mix of 30% pet coke/imported coal and 70% domestic/indigenous.

Birla Corporation is actively pursuing capacity expansion, with Kundanganj Line-III expected to come on stream in Q3 FY26. Further plans include Maihar's Line 2 by FY28, along with new grinding units in Gaya and Prayagraj (Uttar Pradesh), and another 2 MT grinding unit in the Northern part/West UP. These expansions aim to increase total capacity to 24.2 million tonnes by FY28 and 27.6 million tonnes by FY29. The total project cost for these expansions is estimated at INR4,750 crores (including GST), or INR4,200 crores net of GST.

The company's net debt stood at INR2,550 crores as of December 31, 2025. Capex for the first nine months of FY26 was INR300 crores. The full-year capex guidance for FY26 is expected to be less than the earlier guidance of INR800 crores. A significant development was the cancellation or delay of a mine acquisition in Rajasthan, intended for a new plant in Jaisalmer, which the company is currently examining. Incentives booked this quarter amounted to INR8 crores, impacted by GST correction.

The quarter saw mixed sentiments, partly due to operational challenges including industrial relations issues and technical breakdowns at some plants, which constrained volume dispatches in Madhya Pradesh. Additionally, rail movement in Bihar was impaired during the state elections, posing a challenge for the company without a grinding unit there. The management noted that while the industry saw significant non-trade sales, Birla Corporation consciously stuck to its trade-focused strategy, believing in the long-term benefits of brand equity.