Birla Corporation hosted a conference call
on February 7, 2024. In the conference call, the company was represented by Mr
Sandip Ghose –Managing Director and Mr Aditya Sarogi -CFO.
Key
takeaways of the call
Volumes in Q3FY2024 stood at 4.2 million
tonnes up 13.2% YoY and for 9M FY2024 stood at 12.79 million tonnes up 13.3%
YoY.
Blended cement contribution stood at 83%
for Q3FY2024 and 85% for 9MFY2024.
Trade sales stood at 69% of the total sales
in Q3FY2024 and 73% in 9MFY2024.
Premium cement contribution stood at 52% of
the trade sales in Q3FY2024 and 53% in 9MFY2024.
Realization per ton stood at Rs 5278/ton in
Q3FY2024 and Rs 5214/ton in 9M FY2024.
EBITDA per ton stood at Rs 903/ton in Q3FY2024
and Rs 749/ton in 9MFY2024
Premium
share: The company''''s premium share has been above 50%
of the trade sales for a long term. The company has equal presence in both
premium segment and popular segment which has led to a unique market position
for the company.
Power
and fuel: Green power contributes around 23% in Q3 FY2024
and the company intends to take it to around 29-30% by FY2026.
CPP contribution has increased from 12% to
66%.
Fuel
cost: fuel cost stood at 1.58 /Kcal in Q3FY2024 as
against Rs 1.75 /k cal in Q2FY2024. The company expects fuel cost to remain at
similar levels in Q4FY2024.
Imported coal mix stood at 42% in Q3FY2023,
31% in Q2FY2024 and 25% in Q3FY2024.
Lead
distance: Overall lead distance for the company
stood at around 350 kms for Q3FY2024 while for Mukutban plant stood in the range
of 300-310 kms.
Mukutban
plant: It has made steady progress in all the 3
quarters of FY2024.
Mukutban crossed the 200,000-ton mark in
sales and dispatches in January 2024 (earlier expected to be achieved in March
2024).
Mukutban plant clocked positive EBITDA
through each month of the December quarter. This significantly boosted the
Company’s profitability in Q3.
Mukutban plant will service its natural
market and not the whole of Maharashtra. It will service some parts of Gujarat
which provides huge opportunity for growth as lot of construction activity is
going on including bullet train.
With the Mukutban plant servicing its core
markets, the other plants of the company will help the company retain market
share in eastern Uttar Pradesh and Madhya Pradesh. This has helped not only
retain market share but also premium share.
Project
Shikar: The company had launched Project Shikhar in
Q4FY2023, a multi-pronged drive to improve operating efficiency and optimize
costs. Project Shikar is to achieve manufacturing excellence through lot of
small initiatives. The aim is to reduce Rs 100 /ton cost in cement production
in 2 years of which Rs 55/ton was achieved in the current quarter. The company
expects to achieve cost savings of additional Rs 45/ton through project Shikar.
Expansion: the company plans to increase its total capacity to 25 Million
tonnes by FY2027 and to 30 Million Tonnes by FY2023.
To reach the capacity to 25 Million tonnes
by FY2027, the company plans to increase the capacity in Maihar from 10,000
tonnes per day to 20,000 tonnes per day by setting up a second line. The
company also plans to set up split grinding units at Bihar, Uttar Pradesh and
one in West region.
The company plans to commence the setting
up the capacity by end of next financial year.
CAPEX:
The company has incurred capex of rs 415 crore till
date in FY2024 and plans to incur a total Capex of Rs 700 crore in FY2024.
Debt:
Net debt as on Dec 31,2023 stood at Rs 3470 crore.
The company targets to achieve Debt/EBITDA of
3x and capital allocation will be based on that.
Captive
coal mines: The company has 4 captive coal mines,
of which Sial Ghogri mine is operative and the Bikram mine will commence
operation from second quarter of Fy2025. The cost at Sial Ghogri is around Rs
1.25/K cal and at Bikram is around Rs 1.00/k cal.
Outlook:
The company has reduced annual volume
growth guidance for FY2024 to 13%(ask rate will be around 12.3% for Q4FY2024) from earlier 15%. This is on back
of the company being cautious on back of demand in January being
subdued and some slippage in prices. However, the company expects pick up
in demand from middle of February.
The company has dispatched 2,00,000 tonnes
from Mukutban in January 2024 and expects total dispatches from Mukutban in
Q4FY2024 to be 6,00,000 tonnes. The company also expects 8-9% volume growth
from existing markets.
The company has maintained EBITDA guidance per ton
of Rs 850/ton in FY2024. For the EBITDA, guidance the company has factored in price
increase of around 3-4% and also incentives to be received in Mukutban plant in Q4FY2024.
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