Birla Corp Q4 Results Review - Better Than Our Estimates: Nirmal Bang

Nirmal Bang Report

Key metrics of Birla Corporation Ltd. came in higher than our estimates. Volume (actual/estimate: 4.9 million tonne/4.8 mt) and Ebitda/tonne (act/est: Rs 974/Rs 927) grew by 9.2% YoY and ~58% YoY, respectively. Realisation came in higher at Rs 5,218/tonne versus our estimate of Rs 5,068/tonne.

The ongoing measures to bolster profitability include:

1. Increased use of Green Energy (waste heat recovery and solar),

2. cost rationalisation at the Mukutban plant,

3. use of captive coal,

4. optimisation of logistic costs and

5. premiumisation.

The core operations would meet ~20% of its coal requirements via captive mining at Sial Ghoghri and Bikarm mines. Birla Corp will become the highest coal-sourcing company in future with the start of Marki Barka and Brahmapuri coal mining.

We have maintained our Buy recommendation on Birla Corp and valued it at eight times March'26E enterprise value/Ebitda, with a revised target price of Rs 1,890.

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