Birla Corp stock slips 5% as Q1 profit, revenue decline amid weak cement demand

Birla Corporation Ltd

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Shares of Birla Corporation fell nearly 5 percent on August 9 after the company posted YoY decline in its consolidated net profit and revenue for the quarter ended June. "Unusually weak cement prices and sluggishness in demand, coupled with an unprecedented downturn in the jute industry, weighed down Birla Corp's June quarter profitability," the company said in a press release.

At 12.30 pm on August 9, Birla Corp's shares were trading 4.7 percent lower at Rs 1,359 apiece. The stock has declined nearly 20 percent in the past six months, underperforming the Nifty 50 index, which gained 12 percent during the same period. Birla Corp shares, which fell over 4 percent in July, have fallen over 11 percent so far in August.

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The company's net profit fell 45 percent year-on-year to Rs 33 crore and revenue declined 9 percent to Rs 2,190 crore. The expenses incurred by the company fell nearly 8 percent YoY to Rs 2,163 crore.

The Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) of Birla Corp fell over 12 percent YoY to Rs 275 crore in the June quarter.

Birla Corp said that cement sales were impacted in the June quarter by the general elections and extreme weather conditions in some of the company's key markets. Birla Corp said that cement prices fell sharply in Northern, Central, Eastern, and Western India.

"Demand remains subdued even in the current quarter, whereas supply-side expansion is expected in the central and eastern Indian markets due to commissioning of new units. As a result, cement prices are expected to remain under pressure until the third quarter of the current fiscal year," Birla Corp said.

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