Grasim Industries has reported a consolidated net profit of ₹416.38 crore for the second quarter ended September 30. In the year-ago quarter, the company had posted a consolidated profit of ₹450.33 crore. But the results are not comparable as the merger of Jaypee Cement’s Gujarat units with Grasim’s subsidiary UltraTech Cement (effective June 12, 2014) has been incorporated in the latest financials.
Total income for the quarter stood at ₹8,047.91 crore. During the second quarter of last fiscal, Grasim’s income was ₹6,959.18 crore. The company commissioned two production lines of viscose staple fibre (VSF) at Vilayat in Gujarat, with a capacity of 77,000 tonnes a year. The VSF business grew 8 per cent to clock a sales volume of 100,927 tonnes.
Though net revenue increased 5 per cent to ₹1,271 crore, operating profit was lower by 37 per cent at ₹151 crore. This was on account of realisation being affected by weak global prices due to overcapacity in China, Grasim said.
Margins of the VSF business are likely to remain under pressure in the near term due to over-capacity in China.
The chemical business grew 28 per cent on the ramping up of the Vilayat plant to 1,00,052 tonnes. This offset the margin contraction on account of an increase in power cost. Operating profit grew 28 per cent to ₹79 crore. Cement sales grew 10 per cent to 10.92 mt on higher demand and additional volume from the acquisition of Jaypee Cements’ Gujarat units.
Costs went up due to increase in prices of petcoke and input material, higher freight and royalty on limestone.