MP Birla Group

Flagship companies of the MP Birla group, Vindhya Telelinks Limited and Birla Cables Limited cater to the telecom industry.

Vindhya Telelinks Limited
In 2021-22, the revenue from operations decreased by 11.86 percent to ₹1323.95 crore, as compared to ₹1502.06 crore in the previous year. The company achieved profit before interest, depreciation/amortization and tax of ₹186.10 crore during the year 2021-22, as compared to ₹224.99 crore in the previous year. Profit before depreciation and tax during the year 2021-22 stood at ₹134.20 crore, as against ₹155.83 crore in the previous year.

The company’s revenue from operations on account of sale of products, comprising of telecommunication cables, other wires and cables, FRP rod/glass roving, and traded goods increased from ₹481.93 crore in the previous year to ₹560.25 crore. This reasonable increase in the revenue was achieved despite the pandemic-related disruptions in normal operations during the beginning of the financial year under review, and also due to customer-retention measures adopted by the company and reaching out for new customer acquisition, which paved the way for this improved performance even during the challenging period for the industry as a whole.

The company’s revenue from Engineering, Procurment, and Construction (EPC) contracting/turnkey services in the EPC business segment has decreased to ₹859.41 crore, as compared to ₹1103.48 crore in the previous year, mainly due to low order booking in the first half of the financial year.

Its IP-1 performance during the year was muted due to temporary slowdown in capital expenditure by TSPs. Further, the company’s IP-1 business model has delivered tremendous value to all the telecom operators, who are its esteemed customers, deriving greater benefits out of the network built by the company, thereby offering latest digital services to the subscribers with ultimate customer delight.

The company continued its focus on judicious capital allocation, and incurred a capital expenditure aggregating to Rs 8.22 crore, consisting of addition to buildings, plant and equipment, and other fixed assets for further capacity expansion/augmentation.

Birla Cable Limited
The revenue from operations increased by 62.99 percent to ₹535.45 crore during the financial year 2021-22, as compared to ₹328.52 crore during the previous year, primarily due to reasonable increase in order flow, especially from the long-term customers. The profit after tax for the year under review stood at ₹21.74 crore, as compared to ₹8.20 crore in the year 2020-21.

There is a good increase in OFC business, which reached the level of ₹258.04 crore during the financial year 2021-22 as compared to ₹165.10 crore in the previous year. The company’s sales turnover from copper cables and structured cables witnessed phenomenal increase during the financial year 2021-22. The sales increased to ₹260.93 crore, as compared to ₹152.80 crore in the previous year.

The company continued its focus on judicious capital allocation, and incurred capital expenditure aggregating to ₹6.62 crore, consisting of addition to buildings, plant and equipment, and other fixed assets for further capacity expansion/augmentation.

Outlook
At present, India continues to be highly under-fiberized with the fiber deployment to population ratio standing at 0.09 km, which is one-tenth of the global average of 0.9 km. Further, the levels of tower fiberization will have to increase from one-third at present to two-third. In fact, the current data usage is growing at a faster pace, creating a critical need for robust fiberized backhaul.

Large scale fiberization is also key to the success of government-driven programs, such as Digital India, the National Broadband Mission, and the Smart Cities Mission, and for meeting the set targets under the National Digital Communication Policy 2018.

Ultimately, the importance of digital connectivity was very well felt during the Covid-19 pandemic, and in fact the need has surged in a big way. Owing to this, there is a need already arisen to strengthen the optical fiber cable network across the country, and a greater urge to connect the rural masses deep inside the country.

These emerging opportunities for optical fiber cables infrastructure including the impending introduction of 5G technology in the mobile communication networks augur well for both Cable and EPC business segments. Government-driven BharatNet project envisages the deployment of optical fiber cables in large quantity across the country, which may lead to optimum capacity utilization in cables manufacturing set-up, besides bringing enormous opportunity for the EPC division with large-scale cable deployment opportunities.