Hold Birla Corporation - Anand Rathi

Birla Corp. (Price: Rs.296, Target: Rs.320, Rating: Hold)

We expect Birla Corp. to post 18% yoy revenue growth, driven by 23% growth in cement. Its jute division is expected to decline 20% yoy as it was operational for only 72 days during the quarter. The mill which was closed since Apr'12 reopened mid-Oct'12 following a tripartite settlement with the trade unions.

Cement volumes and realisations are expected to rise 13% and 9% yoy respectively. We expect the company to post EBITDA per ton of Rs.470, compared to Rs.730 last quarter and Rs.480 a year earlier.

Jute is expected to continue the losing trend (Rs.20m) but of a smaller magnitude (Rs.60m qoq) given the lower production levels. Net profit is expected to increase 22% yoy (declining 34% qoq) to Rs.530mn.

Source : Equity Bulls

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