Choice Equity Broking's Bold Call: Birla Corporation Skyrockets to ₹1,650 Target!

Choice Equity Broking maintains a confident BUY rating on Birla Corporation, assigning a target price of INR 1,650 per share. The brokerage firm's optimism stems from robust sector tailwinds, including an anticipated 6–8% demand growth in the cement industry and sustained healthy pricing.

Key drivers for Birla Corporation include an ambitious expansion plan designed to increase its capacity by 7.5 MTPA, bringing the total to 27.5 MTPA by FY29. The company is also strategically focusing on enhancing its share of blended cement and sharpening its emphasis on premium product sales and trade channels to achieve higher realisations. Furthermore, a concerted effort towards cost-saving initiatives is expected to lower operational expenses by approximately INR 200 per tonne over the next couple of years.

**Impact**: These strategic initiatives are projected to significantly boost Birla Corporation's financial performance. The firm forecasts a substantial improvement in Return on Capital Employed (ROCE) (excluding CWIP) from 6.2% in FY25 to 13.3% in FY28E, representing an increase of 713 basis points. This anticipated surge in profitability is expected to drive investor confidence and potentially propel the stock price towards the INR 1,650 target.

**Difficult Terms**: * **ROCE (Return on Capital Employed)**: A financial ratio that measures how efficiently a company is using its capital (debt and equity) to generate profits. A higher ROCE indicates better capital efficiency. * **CWIP (Capital Work-in-Progress)**: Refers to the cost of fixed assets that are under construction or development and not yet in use. It is often excluded from ROCE calculations to assess the performance of assets already in operation.