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Anand Rathi Report
Its cement and jute divisions hit by the lockdown and cyclone Amphan, Birla Corporation Ltd.'s revenue, Ebitda and profit after tax fell 35%, 39% and 53% YoY respectively. Frequent local lockdowns and floods in Bihar are hurting demand.
Besides the ongoing expansion, the board approved the Durgapur expansion to address premium-slag demand in the East. We do not expect much rise in the net debt to equity backed by expected profitability improvement despite leveraged balance sheet.
On the 33% YoY volume drop (severe disruptions in key markets and manufacturing centres) and the 1% YoY realisation drop (mainly weak prices in the East), revenue plunged 35% YoY.
Though demand is expected to continue to be hampered on frequent local lockdown and floods in the East, demand would pick up in the central region due to government-funded projects and welfare schemes Mahatma Gandhi Employment Guarantee Act, Pradhan Mantri Gramodaya Yojana; greater labour availability would help.
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