Aditya Birla Real Estate
Driven by a very good growth in topline, reduced depreciation on account of change in method and overall improved operational efficiency, this BK Birla group of company posted an exuberant turnaround in its performance. It posted a net profit of Rs.12 crore v/s net loss of Rs.63 crore in Q3 and loss of Rs.5 crore in Q4FY14. Net sales rose 13% at Rs.2036 crore. Costs rose 11% and EBITDA came in at Rs.210 crore, up 13%. Margins came in marginally lower at 9.98% v/s 10.03%.
In terms of segment, Century has four – textiles, cement, pulp and paper and Realty. Cement is the bread earner at 60% contribution to revenue, followed by textiles and paper at around 20% each, realty contribution is pretty miniscule at less than 0.5%. Cement showed a 61% (YoY) jump in EBIT and paper too did well – it was a turnaround at Rs.49 crore v/s loss of Rs.2 crore. Realty ended the quarter in the red and textiles showed a 12% decline in EBIT.
The company’s debt (short term + long term borrowings) as at 31st March 2015 stands Rs.4836 crore. Interest outgo for the fiscal was at Rs.485 crore. Debt equity ratio came in at 0.41 v/s 0.87 while interest service coverage ratio was at 1.44 v/s 2.05. The company ended FY15 with a five times jump in net profit at Rs.15 crore. Given the market cap of Rs.6500 crore and debt of around Rs4800 crore, enterprise stands at Rs.11,300 crore.
The main buzz around the stock was that along with the results, the company would announce the appointment of Kumar Mangalam Birla as its Chairman and his mother, Rajshree Birla as a director, which in turn could have meant that a path was being made for Century to come into the fold of Aditya Birla group. It would have meant that the company was indeed restructuring and might look at hiving off its cement business to Ultra Tech and divesting in paper and textile unit also, remaining a debt-free, realty company. Nothing of this sort happened at the Board meeting yesterday, except for appointment of Rajshree Birla as an Additional Director under the category of promoter director (women director). And there was no appointment of KM Birla, no restructuring announced but seems inevitable in the future. Thus long term view on the stock remains positive.