Two leading brokerages have issued contrasting recommendations for Birla Corporation with significantly different target prices. Choice Institutional Equities maintains a buy rating with a target price of ₹1,650 per share in their research report dated February 01, 2026, while Motilal Oswal recommends a buy rating with a target price of ₹1,300 in their report dated January 31, 2026. The divergence in target prices reflects different valuation methodologies and operational assumptions between the brokerages.
Recent quarterly results show mixed performance with Birla Corporation's 3QFY26 EBITDA increasing 18% YoY to ₹2.9 billion, though this represented an 8% miss against estimates. The company's operating profit margin surged 2.6 percentage points YoY to approximately 14%, exceeding the estimated 13%. EBITDA per tonne grew 25% YoY to ₹692, surpassing the estimated ₹668. However, adjusted PAT increased 2.4x YoY to ₹754 million, missing estimates by 31% due to lower other income and higher effective tax rate.
Both brokerages highlight similar strategic factors supporting their bullish stance on Birla Corporation. As reported by Choice Institutional Equities, these include sector tailwinds such as better pricing scenario, expansion drive to increase capacity by 7.5 million tonnes to 27.5 million tonnes by FY29E, strategy towards increasing blended cement share, and sharpening focus on premium products and trade sales to lift realisation. The company is also implementing cost-saving initiatives which would drive operating expenses lower by approximately ₹200 per tonne in the next couple of years.
Choice Institutional Equities forecasts Birla Corporation's EBITDA to expand at a CAGR of 14.0% over FY25–28E based on volume growth assumptions of 4%/7%/7% and realisation growth of 3.0%/1.5%/0.0% in FY26E/27E/28E respectively. Motilal Oswal estimates the company's revenue/EBITDA/PAT CAGR of approximately 6%/15%/20% over FY26-28, with EBITDA per tonne estimates of ₹804/₹880 in FY27/FY28E versus ₹735 in FY26E. Choice uses an EV/CE multiple of 1.2x for FY28E while Motilal Oswal values the stock at 7x FY28E EV/EBITDA to arrive at their target price.
Both brokerages acknowledge Birla Corporation's attractive valuation metrics in the current market. According to Motilal Oswal's analysis, the company trades inexpensively at 7x/6x FY27E/FY28E EV/EBITDA and EV/tonne of USD47/USD50. Choice Institutional Equities notes that their target price of ₹1,650 implies a FY28E implied EV/EBITDA multiple of 8.5x, which they consider reasonable under their operational assumptions. The contrasting target prices reflect different brokerage methodologies and market expectations for the cement major's future performance.
