Motilal Oswal's research report on Birla Corporation
BCORP’s 2QFY25 EBITDA declined 39% YoY to INR1.8b (in line) and EBITDA/t fell 35% YoY to INR446 (est. INR436). OPM dipped 3.6pp YoY to 9%. The company reported a net loss of INR252m vs. PAT of INR586m in 2QFY24. The management is not much optimistic about the near-term outlook as the festive season and upcoming state elections could delay the expected recovery until Nov’24-end. It estimates volume growth at ~4% YoY in FY25, implying ~7-8% growth in 2HFY25. It estimates EBITDA/t improvement of up to INR150-170/t in 2H, out of which INR70/t would be from projects Unnati and Shikhar (combined), and the balance will be from better realization, positive operating leverage, and other cost savings.
Outlook
BCORP trades inexpensively at 7x/6x FY26E/FY27E EV/EBITDA, a lower valuation than its similar-sized peers. We reiterate our BUY rating with a revised TP of INR1,500 (earlier INR1,650), based on 9x Sep’26E EV/EBITDA.
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