BigBloc Subsidiary Announces Acquisition of Land for Greenfield AAC Block Manufacturing Facility

StarBigBloc Building Material Ltd, a wholly-owned subsidiary of BigBloc Construction Limited, has announced the acquisition of land for a greenfield AAC Block manufacturing facility in Indore, Madhya Pradesh. This strategic move is expected to enhance the company’s presence in central India, catering to the growing demand for sustainable construction materials.

Share price of BigBloc Construction was down by 4.84% as of 12:55 PM on February 18, 2025. 

Land Acquisition Details

The company has secured approximately 57,500 sq. mts. of land at Gram Nimrani, Tehsil Kasrawad, District – Khargone, Madhya Pradesh for this expansion. The total cost of the land acquisition, including stamp duty, is estimated at ₹6 crore. The new facility will focus on the production of AAC Blocks, a widely preferred eco-friendly building material known for its lightweight, thermal insulation, and fire resistance properties.

Existing Operations and Expansion Plans

Currently, StarBigBloc operates an AAC Block manufacturing plant in Kheda, near Ahmedabad, with an installed capacity of 250,000 cubic meters per annum. This facility serves key regions, including:

• Most parts of Gujarat
• Udaipur in Rajasthan
• Indore in Madhya Pradesh

During Q3-FY25, the capacity utilisation of this plant stood at 75%, reflecting strong demand in existing markets. The new Indore facility is expected to strengthen market penetration in Madhya Pradesh and its surrounding regions.

Financial Performance and Reasons for Tepid Earnings – BigBloc Construction Ltd (Q3 & 9M-FY25)

1. Revenue Performance:
   • Q3-FY25 Revenue: ₹568 Mn (down 7.6% YoY from ₹615 Mn in Q3-FY24)
   • 9M-FY25 Revenue: ₹1,601 Mn (down 8.7% YoY from ₹1,753 Mn in 9M-FY24)
2. Profitability:
   • EBITDA:
     • Q3-FY25: ₹61 Mn (down 62.3% YoY)
     • 9M-FY25: ₹235 Mn (down 46.1% YoY)
   • EBITDA Margins:
     • Q3-FY25: 10.74% (down from 26.34% in Q3-FY24)
     • 9M-FY25: 14.68% (down from 24.87% in 9M-FY24)
3. Net Profit (PAT):
   • Q3-FY25 PAT: ₹3 Mn (down 96.5% YoY from ₹86 Mn)
   • 9M-FY25 PAT: ₹35 Mn (down 84.1% YoY from ₹220 Mn)

Reasons for Tepid Earnings Performance

Lower Demand Due to Festive & Political Season: Q3-FY25 demand declined due to Diwali and Maharashtra state elections, affecting sales and order execution.

Lower Capacity Utilisation: Overall capacity utilisation stood at 53%, with Umargaon plant scaling up gradually and Siam Cement BigBloc at only 11%.

Subsidiary Loss Impact: Siam Cement BigBloc reported a ₹46.8 Mn loss, significantly impacting overall financial performance.

Increase in Costs: Operating expenses rose 11.9% YoY in Q3-FY25 and 3.7% YoY in 9M-FY25, while higher finance costs (₹110 Mn vs ₹65 Mn) weighed on profitability.

Technology Upgradation & Expansion Costs: Umargaon plant upgradation in October 2024 led to lower output, while Wada plant’s Phase 2 expansion doubled capacity but added investment costs.

One-Time Costs & Higher Depreciation: Depreciation rose 51.9% YoY in Q3-FY25 and 38.2% YoY in 9M-FY25, with new product launches and JV costs further impacting margins.

Competitive Pricing Pressure: Increased competition in the AAC block industry resulted in lower pricing power and compressed EBITDA margins.

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