The stock is still holding strong, and that is what makes it different from the other cement stocks. For the past few days, the major cement stocks like ACC, and L&T however have done badly.

On the financial front, some improvement has taken place in the topline during the first quarter of the current year when cement prices have shown a sharp improvement. During the first quarter, sales stood at Rs 244.72 crore; a jump of 5.37 per cent over its corresponding period's figure of Rs 232.24 crore, which can be attributed to the hike in selling prices.

At the same time, on the operational front, net profit stood at Rs 8.74 crore. The same figure in the corresponding period of the previous year stoodat Rs 12.69 crore. On this basis however, there has been no improvement.

However, if one were to consider its immediate quarter, the jump in operating profit has been significant. During the fourth quarter (January to March 1999), the company had recorded an operational loss of Rs 0.08 crore.The operating loss during the third quarter (September 1998- December 1998) stood at Rs 3.89 crore.

On the net level, however, the loss stood at Rs 10.29 crore during the first quarter of the current year. For the future, while the scenario for cement is undoubtedly bullish, much would depend on the company's ability to encash the ongoing boom. The first problem with Birla Corp is its plant location.

The cement plants are located in a supply surplus states where cement prices find difficulty in commanding a premium even when the demand is good, and for this reason, the ongoing improvement has not been benefiting the company as much as the other cost effective players. Thus the importance of cost efficiency has beenunderscored by this situation.

The other problem with the company is that its other businesses; jute, and the synthetic fibre too, have not been doing very well. Overcapacities and low selling prices have been responsible for this development. And for this reason, the stock market does not consider Birla Corp as a pure cement stock, which also results in a qualified price earning multiple. As such, unless the company goes into a major re-structuring, which is the most likely scenario, the market would not take this stock seriously. Perhaps, this would be absolutely the right time for a business re-structuring as the cement business is looking up and the outlook is positive. A reduction in cost or closing down businesses which are difficult to revive will go a long way in boosting the profitability, the stock and shareholder value.