Grasim Industries, an Aditya Birla Group company, has reported a 27 per cent drop in its consolidated net profit for the September quarter to ₹800 crore, against ₹1,090 crore logged in the same period last year, largely due to higher finance cost and depreciation.
The company’s revenue was up 46 per cent at ₹13,646 crore (₹9,356 crore).
Incidentally, Grasim is announcing its quarterly results for the first time after the merger of group company Aditya Birla Nuvo with itself, and spinning off of its financial services business under Aditya Birla Capital.
Overall expenses increased 51 per cent to ₹12,355 crore (₹8,186 crore) on provisioning of ₹1,180 crore due to a change in valuation in liability of insurance policy and ₹750 crore paid as benefit in the insurance business, besides a 157 per cent rise in interest cost at ₹430 crore (₹167 crore).
Depreciation increase Depreciation was up 77 per cent at ₹795 crore due to the acquisition of a Jaypee Cement asset by UltraTech Cement, a subsidiary of Grasim Industries. Consolidated Ebitda was up 34 per cent at ₹2,805 crore (₹2,098 crore).
Sushil Agarwal, Group CFO, Grasim Industries, said the company has managed to put in an excellent operational performance in each of the businesses despite it not being reflected in the bottomline due to various reasons.
During the quarter, viscose staple fibre (VSF) prices remained firm globally, driven by tighter supply due to China’s production cut on environmental concerns. The domestic VSF market saw restocking leading to a 5 per cent increase in sales volume, said the company.
In the chemicals business, domestic caustic soda prices witnessed an uptrend driven by healthy demand and supply constraints in the global market.
Production at the Veraval plant (erstwhile ABNL) contributed to 7 per cent growth in caustic soda sales volumes during the quarter. The ECU (electrochemical unit) realisation was up by 19 per cent in line with global price trend, it said. However, chlorine prices continued to remain weak.
On a standalone basis, the company’s net profit was down 3 per cent at ₹574 crore (₹592 crore) while net sales were up 47 per cent at ₹4,037 crore (₹2,749 crore).
Shares of the company were down 1 per cent at ₹1,209 on Tuesday.