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Informist, Thursday, Apr. 3, 2025

 

--BirlaNu MD: Targeting 10-12% margins in next three years

--BirlaNu MD: Increasing sales volume to aid margin growth in next 3 years

--BirlaNu MD: Premiumisation, exports to aid margin growth in next 3 years

--BirlaNu MD: Expect to come up with innovative piping product by Dec-end

 

By Avishek Rakshit

 

KOLKATA – C.K. Birla Group company BirlaNu Ltd., which has charted a top line growth path for itself, is targeting to nearly double its margins to around 12% in the next three years, Managing Director and Chief Executive Officer Akshat Seth told Informist. The margin growth will come in mostly from increasing sales volume, premiumisation of the portfolio, and increasing global sales of margin-accretive products, he said.

 

"The first milestone is to report double-digit margins, say in the range of 10-12% from the current level of single-digit margins," Seth said. Currently, the company's margins are around 6.5%. 

 

The company, which has recently renamed itself as BirlaNu from erstwhile HIL Ltd., is into the business of constructing home and building products. The company is eyeing to increase its sales volume in all of its product categories like roofing, autoclaved aerated concrete blocks, pipes, and panels, which will help it scale up the business and increase cost efficiencies, as well as gain market share. Apart from focussing on retail sales, the company plans to increase its efforts to maximise institutional and government sales. 

 

During Apr-Dec, the company reported a 6% on-year revenue growth at INR 26.7 billion, but the company went into the red by posting a loss of INR 80 million as compared to a net profit of INR 350 million in the year-ago period. The earnings before interest, tax, depreciation, and amortisation also tanked sharply by 56% to INR 560 million. 

 

Seth said once the company is able to achieve a substantial increase in sales, the operating cost structure will become more efficient, which will help increase margins. At the same time, once sales volume increases, raw material and sourcing costs are also expected to come down because of the sheer scale of procurement. 

 

Seth said while the company is increasing its presence across India and in key export markets like the US, China, and West Asia, and aiming market share gains across its entire portfolio, the company is focussing on premiumising the portfolio as well.

 

For instance, although it is weaker in the pipes segment compared to its competitors, it is coming up with oriented poly-vinyl chloride pipes by December-end, Seth said, adding that the product is poised to replace the ductile iron-based pipes in a few years. "Only a few companies have the technology to make it and we are one of them," he said. 

 

In the exports market, BirlaNu is targeting to sell premium products which will help boost the margins, Seth said. "Pipes and related products are primarily a commodity space, we are aware of this fact. But the aim is to export premium and upscale products which will aid the margins," he said.

 

Currently, BirlaNu gets 65% of its annual revenue from India, and the rest 35% from export markets. Without divulging any specific targets, Seth said the company is trying to increase the contribution of exports and global sales to its annual revenue. The company will focus on countries like China, the US, and those in the West Asia region to boost exports of premium products. 

 

At 1438 IST, shares of BirlaNu, which is listed as HIL Ltd, traded 2.5% up at INR 1,855 on the National Stock Exchange. End
 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Tanima Banerjee

 

 

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