At a Glance
Birla Corporation, the cement arm of the M.P. Birla Group, just poured out its Q1 FY26 results – and let’s just say the mix was more like a weak mortar. Profit came in at ₹119.6 Cr, a massive 266% YoY jump, but the stock still tanked 8.7% because the market doesn’t get impressed by old cement tricks. Revenue stood at ₹2,454 Cr with an OPM of 14%. Throw in an impairment loss of ₹38 Cr, and you’ve got drama baked in the kiln.
Introduction
Birla Corp is that cement company you almost forget exists until you see its bags at a construction site. It’s neither as flashy as UltraTech nor as premium as Shree Cement – it’s somewhere in between, like the middle child trying hard to impress. Q1 FY26 had a solid operational performance but rising costs and impairment charges rained on the parade. Investors dumped the stock, and the price slid to ₹1,381 – a painful sight for long-term holders.
Business Model (WTF Do They Even Do?)
The company makes cement, lots of it.
- Product Lines: OPC, PPC, slag cement, wall putty, construction chemicals – they’ve got the whole builder’s toolkit.
- Brands: Chetak, Samrat, Ultimate Ultra – sounds more like motorbikes than cement.
- Other Ventures: Jute goods – yes, they still do that.
Revenue heavily depends on cement sales (over 90%), with premium products trying to push margins up. Distribution is strong in North and Central India, but market share lags biggies like UltraTech.
Financials Overview
Q1 FY26 Snapshot
- Revenue: ₹2,454 Cr (+12% YoY)
- EBITDA: ₹347 Cr (OPM 14%)
- Net Profit: ₹120 Cr (YoY surge, QoQ dip)
- EPS: ₹15.5
FY25 Recap
- Revenue: ₹9,214 Cr
- PAT: ₹295 Cr
- ROE: 4.8%
Auditor’s Roast: Margins dance up and down like cement prices in monsoon season.
Valuation
- P/E Method
- EPS (TTM): ₹49.6
- Industry P/E: 25–50
- Fair Value ≈ ₹49.6 × 30 = ₹1,480
- P/B Method
- Book Value: ₹911
- Industry P/B: 1.5–3
- Fair Value ≈ ₹911 × 1.5 = ₹1,365
- DCF (Assuming 7% Growth)
- Conservative fair value ≈ ₹1,350 – ₹1,500
🎯 Fair Value Range: ₹1,350 – ₹1,500
Current price ₹1,381 sits right in the middle – neither cheap nor a steal.
What’s Cooking – News, Triggers, Drama
- Impairment Loss ₹38 Cr: Linked to legal disputes over incentives.
- Capacity Expansion: Ongoing projects to improve utilization.
- Market Trends: Cement demand rising, but pricing remains volatile.
- Stock Reaction: Down 8.7% – Mr. Market threw a tantrum.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 14,331 |
| Liabilities | 7,393 |
| Net Worth | 6,938 |
| Borrowings | 3,489 |
Remarks: High debt, low ROE – not exactly a cemented fortress.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Operating | 805 | 1,619 | 1,669 |
| Investing | -365 | -700 | -886 |
| Financing | -318 | -969 | -823 |
Remarks: Operating cash solid, but capex burns cash faster than wet cement dries.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 4.8% |
| ROCE | 7.0% |
| P/E | 25.9x |
| PAT Margin | 4% |
| D/E | 0.5 |
Remarks: ROE is sad, P/E is stretched – not sexy, just average.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 8,682 | 9,663 | 9,214 |
| EBITDA | 785 | 1,440 | 1,217 |
| PAT | 40 | 421 | 295 |
Remarks: Profits bounce, but trend not inspiring confidence.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| UltraTech Cem. | 77,752 | 6,911 | 52x |
| Shree Cement | 19,283 | 1,118 | 99x |
| Ambuja Cements | 35,045 | 4,143 | 37x |
| Birla Corp | 9,478 | 382 | 26x |
Remarks: Birla trades cheaper than UltraTech but lacks the premium moat.
Miscellaneous – Shareholding, Promoters
- Promoters: 62.9% (stable)
- FIIs: 7.0% (growing)
- DIIs: 15.5%
- Public: 14.5%
Sarcastic Note: Promoters hold tight, FIIs nibble, public prays.
EduInvesting Verdict™
Birla Corporation is a mid-tier cement player with steady operations but weak profitability. Q1 FY26 profit jump looks good on paper, but the impairment loss and low ROE remind investors this is no UltraTech. Demand tailwinds exist, yet cost pressures and debt weigh heavy.
SWOT Quickie
- Strengths: Strong brand portfolio, improving EBITDA margins.
- Weaknesses: Low ROE, high debt, volatile earnings.
- Opportunities: Infra push by government, capacity expansion.
- Threats: Fuel cost spikes, legal disputes, pricing pressure.
Final Word: At ₹1,381, the stock is fairly valued. Hold it if you like cement stories, but don’t expect fireworks – it’s more like slow-drying concrete.
Written by EduInvesting Team | 30 July 2025
SEO Tags: Birla Corporation Q1 FY26 Results, Cement Stocks India, MP Birla Group Analysis
