Birla Corp Ltd has reported a 25.2 per cent increase in revenue to INR22,180.6m (US$278.8m) in the first quarter of FY22-23, despite tepid cement demand. However, profitability was hit by rising power, fuel and freight costs, along with the costs incurred with the optimisation of the newly-commissioned Mukutban plant in eastern Maharashtra. Commercial production at the plant began on 30 April 2022 with capacity at the unit expected to reach 3.9Mta, taking the company's total production capacity to almost 20Mta.
Consolidated EBITDA in the first quarter of FY22-23 came in at INR2736.1m, down 22.5 per cent YoY. Excluding Mukutban EBITDA would have been around INR3121.9m, a decline YoY of a little over 11 per cent. Although the company was able to improve realisation from cement sales for the quarter by 7.7 per cent YoY to INR5311/t, this was not enough to offset the 79 per cent YoY increase in fuel costs. Rising fuel prices were further aggravated by disruptions in supply of linkage and e-auction coal, forcing the company to procure coal from the open market at much higher prices.
However, capacity utilisation improved over the quarter on a like-for-like basis to 101 per cent. The use of industrial waste as alternative fuel and raw materials was also stepped up across all plants to 12 per cent of total fuel consumption.
In terms of sales volumes, the quarter saw the company sell 3.93Mt, compared to 3.35Mt in the same quarter a year earlier, up 17.3 per cent. Sales of high-yielding blended cement grew 15 per cent by volume over the same period, although its share of total sales by volumes, at 91 per cent, reflect a marginal decline. Sales of premium products grew three per cent by volume. According to the company, volume growth was seen across all its key markets, driven largely by the infrastructure sector. However, the price hike in April to pass on the rise in input costs could not be sustained due to adverse market conditions.
