Axis Securities has retained a BUY call on Birla Corporation, lifting its target price to Rs 1,400 from Rs 1,375, as the cement maker’s Q4FY26 numbers came in ahead of expectations on revenue, EBITDA margin and profit. Axis Securities says Birla Corporation is entering a stronger operating phase, backed by capacity additions, better product mix, lower costs and firm demand from infrastructure and housing. The brokerage sees the company’s cement capacity rising to 27.5 mtpa by FY28-29 from 21.5 mtpa, with new grinding units and an expanded integrated setup supporting about 5% volume CAGR over FY25-28E. It also believes the stock remains attractively valued at 8x FY28E EV/EBITDA, with an implied upside of 32% from the CMP of Rs 1,063 as of 11th May, 2026.

Why the broker stays bullish

Axis Securities is keeping its BUY stance because Birla Corporation delivered a clean beat in Q4FY26 and is pairing that operational momentum with a visible expansion pipeline. The report notes that revenue, EBITDA margin and PAT all outperformed estimates, while the company’s cost of cement production declined to Rs 4,268 per tonne, helping margins hold up despite a challenging pricing environment.

The broader thesis rests on scale. The company plans to expand capacity through a mix of brownfield and greenfield projects, including new grinding units in Prayagraj, Gaya and Aligarh, along with a clinker grinding unit at Maihar, Madhya Pradesh. Axis Securities expects the rollout to support growth in volumes, EBITDA and earnings over the medium term.

Quarterly scorecard

Q4FY26 was a strong operational quarter by almost every meaningful measure. Net sales rose to Rs 2,828 crore, EBITDA stood at Rs 510 crore, and net profit climbed to Rs 295 crore versus Rs 257 crore a year ago, aided by lower costs and higher realisation.

The headline surprise was not just growth, but the degree of the beat. Volume rose 4% year on year to 5.45 million tonnes, capacity utilisation reached 95%, and EBITDA per tonne improved sharply to Rs 936, up 35% quarter on quarter.

What drove margins

Cost discipline did the heavy lifting. The company’s overall cost per tonne fell 2% year on year and 3% quarter on quarter to Rs 4,268, while power and fuel costs dropped 18% sequentially to Rs 861 per tonne. Freight costs also softened, and staff costs came down, creating room for stronger operating profitability even though realisation remained under pressure.

Blended realisation came in at Rs 5,204 per tonne, up 2% quarter on quarter but down 3% year on year. That tells a clear story: pricing was still weak, but better mix and efficiency more than compensated for it in the quarter.

Capacity and growth plan

Birla Corporation’s expansion pipeline is the most important part of the story. Axis Securities says the company’s total capacity should rise from 21.5 mtpa to 27.5 mtpa by FY28-29, or roughly 22% from current levels, with an investment of Rs 4,335 crore approved for the next phase.

The brokerage expects this to translate into volume growth of 5% CAGR, revenue growth of 8%, EBITDA growth of 14% and PAT growth of 26% over FY25-FY28E. It also expects EBITDA per tonne to rise at an 8% CAGR to Rs 860 per tonne over the same period.

Demand backdrop

The demand picture remains constructive. Axis Securities expects Indian cement demand to stay healthy, powered by government-led infrastructure spending on roads, railways and housing, along with support from the real estate cycle. The brokerage pegs industry growth at 7%-8% CAGR over FY25-28E.

That said, the report does not sugarcoat the risks. Pricing pressure persists because of elevated competitive intensity and large industry-wide capacity additions, while geopolitical tensions and monsoon behaviour could influence fuel, freight and demand patterns in the near term.

Valuation and levels

The stock is currently valued at 7x FY26E EV/EBITDA and 6.5x FY27E EV/EBITDA, which Axis Securities sees as attractive for a company with improving utilisation and a multi-year expansion cycle. It has raised the target price to Rs 1,400 per share, implying 32% upside from the CMP of Rs 1,063.

For investors, the key levels are straightforward. The immediate reference level is the current market price of Rs 1,063, the brokerage target is Rs 1,400, and the 52-week range in the report is Rs 770 to Rs 1,537. A sustained move above the recent resistance band would likely strengthen the market’s confidence in the expansion narrative, while the downside buffer appears anchored by the company’s improving operating metrics and valuation support.

What matters next

The next leg of the story will depend on execution. If Birla Corporation can convert its expansion spending into steady volume gains without letting leverage rise too aggressively, the re-rating case stays intact. Net debt currently stands at Rs 2,100 crore, and the company expects peak net debt to remain around Rs 4,000 crore, supported by internal accruals.

In plain terms, Axis Securities is betting that Birla Corporation can turn scale into earnings while keeping the balance sheet under control. That combination — expanding capacity, improving mix, and disciplined costs — is what underpins the BUY call and the new Rs 1,400 target.