Buy Birla Corporation; target of Rs 1300: Motilal Oswal

1300

Motilal Oswal's research report on Birla Corporation

Birla Corporation (BCORP)’s 3QFY26 performance was below our estimates, due to lower-than-estimated sales volume. EBITDA increased ~18% YoY to INR2.9b (~8% miss). OPM surged 2.6pp YoY to ~14% (est. ~13%). EBITDA/t grew ~25% YoY to INR692 (vs. est. INR668). Adj. PAT increased 2.4x YoY to INR754m (~31% miss, due to lower other income and higher ETR).

Outlook

We estimate BCORP’s revenue/EBITDA/PAT CAGR of ~6%/15%/20% over FY26 28. Estimate EBITDA/t at INR804/INR880 in FY27/FY28E vs. INR735 in FY26E. BCORP trades inexpensively at 7x/6x FY27E/FY28E EV/EBITDA and EV/t of USD47/USD50. We value the stock at 7x FY28E EV/EBITDA to arrive at our TP of INR1,300. Reiterate BUY.

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