Summary
Birla Corporation Limited - Q3 FY 2026 Earnings Call Summary Saturday, January 31, 2026, 4:07 P.M. IST
Event Participants
Executives 6 Aditya Saraogi (Group CFO), Kalidas Pramanik (CMO), Manoj Kumar Mehta (Company Secretary & Legal Head), Nitesh Soni (GM Finance & Accounts), Rajat Kumar Prusty (Chief of Manufacturing and Projects), Sandip Ghose (MD & CEO)
Analysts 5 Harshal Mehta (AMSEC), Pathanjali Srinivasan (Sundaram Mutual Fund), Prateek Kumar (Jefferies), Raghav Maheshwari (Equirus Securities), Shravan Shah (Dolat Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Volume (Consolidated) | - | +4% to 5% YoY growth guidance for the full year; impacted by technical breakdowns in MP and logistics issues in Bihar. |
| Volume (Mukutban) | 6.3 lakh tonnes | Ramp-up progressing; achieved highest-ever monthly dispatch during the quarter. |
| Trade Sales % | Increased (Not quantified) | Strategic focus remained on B2C/Trade segment despite peers shifting up to 50% volume to non-trade. |
| Premium Cement % | 63% | +15% YoY growth; management held premium prices steady despite popular segment price drops. |
| Lead Distance | 328 km | Reduced lead distance achieved through optimized distribution despite lower grinding-to-integrated unit ratio. |
| Fuel Cost (KKL) | ₹1.47 per 1,000 kcal | -2% QoQ from ₹1.50; expected to rise marginally to ₹1.50 in Q4 FY26. |
| Net Debt | ₹2,550 crores | Reflects ongoing deleveraging and capex management. |
| Capex (9 Months) | ₹300 crores | Significantly lower than the earlier full-year guidance of ₹800 crores. |
| Incentives | ₹8 crores | Lowered due to GST-related corrections and policy changes. |
Geographic & Segment Commentary
- Central Region: Experienced the highest pricing pressure and competitive intensity. Management noted that while realization was challenged, they maintained trade market share and avoided deep discounting used by competitors in the non-trade segment.
- West (Maharashtra/Mukutban): Mukutban plant utilized at high levels with a 0.61 CC ratio. Focus remains on premium products (Perfect Plus) in Vidarbha and Khandesh, benefiting from brand rationalization by competitors.
- North & East: North remains a small volume contributor (6-7% market share) with higher costs due to legacy assets. In the East (West Bengal), the company focuses on high-clinker realization through slag cement (Unique Plus) sold in close proximity to plants.
Company-Specific & Strategic Commentary
- Clinker Realization Strategy: Management prioritizes “clinker realization per tonne” over absolute cement realization, optimizing product and geo-mix to maximize margins on limited clinker capacity.
- Trade vs. Non-Trade (B2C Focus): Explicit strategy to avoid non-trade (infrastructure) sales where price gaps between trade and non-trade reached ₹60-₹80 per bag.
- Premiumization: Premium volumes grew 15% YoY, now accounting for 63% of sales; management maintains a price premium of ₹10 over B-category players in heritage brands (Samrat, Chetak).
- RMC Expansion: Testing waters with 5 plants currently (Varanasi and Gorakhpur coming online); strategy is cautious and focused on brand synergy rather than volume dumping.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Capacity | 24.2 MTPA by FY28 | Includes Maihar Line 2, Gaya, and Prayagraj grinding units. |
| Capacity | 27.6 MTPA by FY29 | Phase 2 expansion including an additional 1.4 MTPA at Gaya and a 2 MTPA unit in Western UP. |
| Volume Growth | 4% - 5% for FY26 | Management expects to stay in line with industry average, focusing on value over volume. |
| Commissioning | Q4 FY26 | Kundanganj Line III (1.4 MTPA) to be commercialized within the current quarter. |
| Fuel Cost | ₹1.50 per 1,000 kcal | Anticipated marginal increase in Q4 FY26. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory/Legal | Rajasthan Jaisalmer mine acquisition was recently canceled; management is examining legal options as they had foregone other bidding opportunities. |
| Operational Reliability | Technical breakdowns in Madhya Pradesh and industrial relations (IR) issues in other plants impacted Q3 production and bottom line. |
| Logistics Constraints | Lack of a grinding unit in Bihar led to rail movement impairment during elections as passenger trains were prioritized over goods. |
| Pricing Volatility | Heavy discounting by competitors in non-trade segments (driven by state incentives) puts pressure on overall market realizations. |
Q&A Highlights
Pricing Dynamics
- Question: Why is EBITDA per tonne lower despite high premium and trade mix? (Raghav Maheshwari)
- Answer: It is a function of legacy high-cost plants vs. new ones, and higher logistics costs for Maihar compared to Satna. Competitors with newer plants also benefit from state incentives even on OPC sales, which Birla Corp lacks. (Sandip Ghose)
Expansion Strategy
- Question: What is the timeline and cost for the next expansion phase? (Prateek Kumar/Rajesh Ravi)
- Answer: Total project cost is ₹4,200 crores (net of GST). Maihar Line 2 and grinding units in Gaya/Prayagraj will reach 24.2 MTPA by FY28. FY29 will see the bridge to 27.6 MTPA. (Aditya Saraogi)
Market Share Segment
- Question: How will you regain lost market share in non-trade? (Harshal Mehta)
- Answer: We are not concerned with non-trade market share. We focus on B2C/Trade market share, which improved by a few basis points. I would be happy with 0% non-trade share if trade is maximized. (Sandip Ghose)
Key Takeaway
Birla Corporation delivered a quarter focused on strategic resilience, maintaining its course on trade (B2C) leadership and premiumization despite significant pricing volatility in the Central region. Premium cement now accounts for 63% of sales, while the Mukutban plant has successfully ramped up to achieve record monthly dispatches. Despite operational headwinds including technical breakdowns and logistics issues in Bihar, the company reduced its lead distance to 328 km and maintained a healthy net debt of ₹2,550 crores. Looking ahead, the company is set to commercialize the Kundanganj Line III in Q4 FY26 and has laid out a clear roadmap to reach 27.6 MTPA by FY29 with a ₹4,200 crore capex plan. Management remains committed to a value-over-volume strategy, prioritizing clinker realization and brand equity over low-margin non-trade sales.
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