Choice Equity Broking's report on Birla Corporation
We continue to be constructive on BCORP owing to sector tailwinds, such as 6–8% expected demand growth in the industry and healthy pricing. We are optimistic on the basis of: 1) Expansion drive to increase capacity by 7.5mtpa to 27.5mtpa by FY29E, 2) Strategy towards increasing blended cement share, 3) Sharpening focus on premium products and trade sales to lift realisation and 4) Cost-saving initiative which would drive opex lower by ~INR 200/t over the next couple of years. Hence, ROCE (ex-CWIP) expands by 713 bps, from 6.2% in FY25 to 13.3% in FY28E.
Outlook
We maintain our BUY rating on BCORP with a TP of INR 1,650/share. Our Volume, Realisation, EBITDA/t and EBITDA assumptions remain unchanged (Exhibit 2).
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