Birla Corporation shares drop over 7% despite 264% profit surge in Q1

Birla Corporation on Wednesday reported a substantial year-on-year rise in its consolidated net profit for the first quarter of FY26, coming in at ₹120 crore, marking a nearly four-fold jump from ₹33 crore in the corresponding period last year. The company attributed the growth to improved cement sales, lower fuel costs and a strong turnaround in its jute division.

Shares of Birla Corporation closed 7.13% lower at ₹1,405 apiece on the NSE. Over the past 5 days, the stock has declined nearly 4%. On the other hand, the stock has shown a significant hike of 21% in the last 6 months.

However, on a sequential basis, the company saw a sharp 53% decline in profit compared to ₹257 crore in the preceding quarter (Q4FY25).

Revenue from operations stood at ₹2,454 crore in the April-June quarter, up 12% from ₹2,190 crore in Q1FY25. Total income came in at ₹2,486 crore. However, this was lower than the ₹2,815 crore reported in the January-March period.

Despite the strong annual performance, Birla Corp’s stock dropped over 7% after the earnings announcement, reflecting investor concerns over the quarter-on-quarter decline and muted demand outlook in key markets.

The company reported a 13% year-on-year growth in consolidated revenue to ₹2,486 crore and a 264% surge in net profit. Sales volume rose 9%, with cement dispatches reaching 4.79 million tonnes, compared to 4.38 million tonnes in the same quarter last year.

EBITDA for the quarter rose 38% to ₹379 crore from ₹275 crore a year ago. The Cement Division contributed ₹364 crore to EBITDA, up 34% YoY. The company's profits improved because it earned more per unit in western and eastern regions and sold more premium products. But demand and prices stayed weak in central India.

Overall, the company's realization improved moderately to ₹4,858 per tonne, with EBITDA per tonne rising 19% to ₹715. The cement segment's operating profit margin expanded to 14.7%, compared to 12.5% in the same quarter last year. Despite flat pricing and increased reliance on third-party clinker purchases due to extended maintenance shutdowns, the company managed to protect margins.

Amid an estimated pan-India cement demand growth of 4-5%, Birla Corporation Limited consolidated its market share in all key regions. In the east, the Company witnessed an 18% growth in cement sales, followed by 15% in the west. In the core markets in the central and northern regions, the Company’s cement sales grew 7-8%.

Clinker production declined 17% YoY to 2.44 million tonnes. In response, the company focused on boosting sales of premium brands and blended cement to maintain value market share. Perfect Plus, the flagship brand, saw 19% volume growth, while Unique Plus grew 37%, albeit on a lower base. Premium products accounted for 58% of trade channel sales during the quarter.

Blended cement contributed 89% to total sales, up from 84% last year. The segment witnessed 16% YoY growth, with notable contributions from West Bengal (37%) and Rajasthan (15%).

Region-wise, cement sales grew 18% in the east, 15% in the west, and 7–8% in central and northern regions. Amid pan-India cement demand growth of 4–5%, the company maintained its market share. Operational efficiency improved as power and fuel costs per tonne declined 8.4% to ₹933 from ₹1,019 last year. Green energy made up 26.9% of total power consumed.

Commenting on the Q1 results, the Managing Director and CEO of Bira Corporation Limited Shri Sandip Ghose said, “With rapid scaling up of the Mukutban plant and profitable utilization of the Chanderia expansion, the Company is on a stable footing to focus on its next phase of growth, both with brownfield investments and new greenfield capacities.”

Meanwhile, the Jute Division recorded a significant turnaround, reporting a cash profit of ₹6.4 crore in Q1FY26 compared to a ₹3.9 crore loss last year. This was led by 63% growth in domestic sales and a 133% jump in export revenues. Despite a spike in raw jute prices, cost reduction measures and improved production helped boost profitability.

The company is also investing in productivity upgrades, including installing new looms and commissioning a rooftop solar facility, expected to bring in further cost savings by the end of FY26.

Birla Corporation Limited, the flagship of the MP Birla Group, was founded in 1919 as Birla Jute Manufacturing Company. It has businesses in cement and jute. Its Birla Jute Mills was the first jute mill set up by an Indian. Along with its subsidiary RCCPL Pvt Ltd, the company operates 10 cement plants across eight locations with a total capacity of 20 million tons. Under the MP Birla Cement brand, it offers a range of cement products for various climates and customer needs. The company also sells construction chemicals and wall putty.