homeearnings NewsKesoram Industries trims volume guidance for FY24, retains earnings per tonne outlook
Kesoram Industries trims volume guidance for FY24, retains earnings per tonne outlook
Speaking to CNBC-TV18, P Radhakrishnan, Whole Time Director and CEO of Kesoram Industries, discussed the company's Q3FY24 earnings and the progress on the demerger of the cement business into UltraTech Cement.
Kesoram Industries has cut its volume expectations for the current financial year 2024 (FY24) to 7.6-7.7 million tonne following a subdued third quarter show. The company had earlier guided for volumes of around 8 million tonne for the year.
However, it has retained the earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance at ₹625-650 per tonne.
Speaking with CNBC-TV18, P Radhakrishnan, the company’s Whole Time Director and CEO provided insights into the company's current operations, and details about the progress on the demerger of its cement business into India’s largest cement producer, UltraTech Cement.
On November 30, UltraTech Cement, India's largest cement company, announced the acquisition of the cement business of Kesoram Industries. UltraTech will issue one equity share at a face value of ₹10 for every 52 equity shares of Kesoram, each valued at ₹10.
Kesoram will transfer its two integrated units located in Sedam (Karnataka) and Basantnagar (Telangana), with a combined capacity of 10.75 million metric tonnes per annum (mtpa). Radhakrishnan said there is potential to increase total capacity by an additional 1.5 million tonnes per annum at the plants at a capex of roughly ₹1,500 crore.
The cement business contributed to bulk of Kesoram's overall turnover. After the proposed demerger, the company will be left with the rayon and chemicals business, which had revenue of ₹176.5 crore in the first nine months of FY24 with a loss on earnings before interest and tax (EBIT) of around ₹28 crore.
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Radhakrishnan believes the rayon business, which includes the transparent paper segment, has good growth potential but may require capital infusion. He expects the business to have a sustainable EBITDA per tonne run rate of around ₹60 crore.
Kesoram Industries, a member of the BK Birla Group of Companies headquartered in Kolkata, West Bengal, has a market capitalisation of ₹5,291.75 crore.
The stock has gained more than 165% over the past year.
For more details, watch the accompanying video
(Edited by : Shweta Mungre)
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