Grasim Industries, an Aditya Birla Group company, reported a marginal increase in December quarter net profit at Rs 334 crore against Rs 332 crore in the same period last year due to lower realisation. Net sales were up 13 per cent to Rs 8,036 crore (Rs 7,117 crore).
While the company’s VSF production was up 15 per cent at 105,834 tonnes, sales were almost flat at 97,001 tonnes against 97,049 tonnes logged last year. Net revenue from the VSF business was down four per cent at Rs 1,203 crore (Rs 1,250 crore) and the profit before interest and tax dipped 25 per cent to Rs 98 crore (Rs 131 crore).
Finance costs were up 49 per cent at Rs 186 crore (Rs 125 crore).
Realisation in VSF business slipped four per cent due to excess supply in the market, coupled with a fall in cotton prices, putting pressure on VSF pricing. The company expects realisation to remain under stress in the near term as no revival is seen in cotton and polyester prices. It foresees the closure of unviable units and consolidation in China to help stabilise the sector.
In January, Grasim commissioned the third line of the Viscose Staple Fibre production of 21,900 tonnes per annum at Vilayat, Gujarat, taking its total production capacity to 476,325 tonnes per annum.
Production of chemicals improved 40 per cent to 106,516 tonnes due to fresh capacity at Vilayat. The sales volume was up 37 per cent to 106,516 tonnes while profit before tax was up five per cent at Rs 44 crore.
The cement business’ contribution to Grasim profitability was up two per cent at Rs 240 crore (Rs 234 crore), while that of Idea Cellular increased 38 per cent to Rs 33 crore. Grasim’s consolidated debt was at Rs 12,758 crore in the first nine months of this fiscal against Rs 9,681 crore registered in March 2014. Net debt was at Rs 6,915 crore (Rs 3,442 crore).
On a standalone basis, net profit was down 26 per cent at Rs 94 crore and sales were up six per cent at Rs 1,543 crore (Rs 1,456 crore).
Shares of the company were down one per cent at Rs 3,882 on Friday.