Q1 2027 BirlaNu Ltd Earnings Call Transcript
Key Points
- BirlaNu Ltd (BOM:509675) delivered strong Q1 FY27 results with India revenue up 11% to INR833 crore and EBITDA up 71% to INR98 crore, reflecting robust growth and profitability.
- The roof segment achieved record revenue of INR517 crore, up 17% year-on-year, with market share gains of about 1% and margin expansion of nearly 4%.
- The walls business continued its momentum with 14% revenue growth and a 270 basis point EBITDA margin improvement to 10.2%, driven by strong demand and cost management.
- The pipes business showed resilience despite a challenging market, with EBITDA margins expanding by over 660 basis points due to improved product mix and disciplined pricing.
- The company reduced gross borrowings by nearly INR100 crore during the quarter and improved working capital by approximately INR100 crore year-on-year, enhancing financial flexibility.
- Strategic capacity expansions, including a new greenfield designer board plant in Hyderabad, are expected to add INR300-350 crore in revenue and INR75-85 crore in EBITDA over the next couple of years.
- Parador's order book is healthy, up over 10% year-on-year, with a strong pipeline indicating recovery in H2, and a BCG-led cost-out program is expected to deliver 300-400 basis points of EBITDA margin uplift.
- The pipes business experienced a revenue decline of 11% and volumes down 27% due to sharp swings in PVC resin prices, particularly in April, impacting demand.
- Parador reported an EBITDA loss of INR13 crore in Q1, impacted by elevated raw material costs, one-time SAP migration expenses, and planned maintenance costs front-loaded into the quarter.
- Construction chemicals was adversely impacted by the Middle East conflict, with key raw material prices increasing over 50% and disruptions in customer industries like tiles, leading to a temporary slowdown in demand.
- The company faced covenant breaches on debt-equity ratios in FY26, requiring waivers from banks, indicating elevated leverage levels.
- Geopolitical uncertainties, raw material price volatility, freight costs, and rising labor costs continue to pose risks to future performance.
- The pipes segment's margin improvement was partly due to a lower share of agri-pipes in the sales mix, which may not be sustainable if the mix shifts back.
- Parador's profitability is expected to remain under pressure in the near term, with full impact of cost initiatives only visible by Q4 FY27.
Ladies and Gentlemen, good day and welcome to BirlaNu Limited on the conference call.
(Operator Instructions)
I now hand the conference over to Mr. Mihir Shah from CDR India. Thank you and over to you Mr. Shah.
Thank you, Tanish. Good afternoon, everyone, and welcome to BirlaNu Limited's Q1 FR27 Earnings Response Call for Investors and Analysts.
Today we have with us Mr. Akshat Seth, Managing Director and CEO of the company and Mr. Ajay Kapadia, Chief Financial Officer. We'll first have Mr. Akshat Seth making his opening comments and he'll be followed by Mr. Ajay Kapadia, who will take you to the financial perspectives that lie ahead.
Before we begin, I'd like to point out that certain statements made in today's call could be cordial in nature and details in this regard are available in the earnings presentation which have been shared with you earlier. I'd like to invite Mr. Kate to present his views on the performance and strategic imperatives.
Thank you Anu to you
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