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Grasim Industries, part of the Aditya Birla Group, reported a 20 per cent fall in net profit at Rs 487 crore in the first quarter of this fiscal against Rs 610 crore registered in the same period last year.
Net sales were up 16 per cent at Rs 7,976 crore (Rs 6,893 crore).
Consolidated profit margins were hit due to pricing pressure in both the viscose staple fibre and cement business given the current over-capacity in these sectors, said the company.
Finance cost has gone up 33 per cent to Rs 126 crore, while depreciation increased four per cent to Rs 358 crore. The interest and depreciation cost went up with the commissioning of the various projects, said the company. Tax charges were also higher due to lower exempt income and recent changes in tax laws.
On a standalone basis the company’s net profit was down 53 per cent at Rs 106 crore, while net sales were up 24 per cent at Rs 1,424 crore.
VSF sales were up 11 per cent at 86,389 tonnes, while production grew two per cent to 89,827 tonnes. Revenue from the VSF business was up 12 per cent at Rs 1,094 crore as realisations globally remained subdued owing to overcapacity in China. Profit before interest and tax was down 64 per cent at Rs 54 crore as margins dipped to seven per cent from 19 per cent in the same period last year.
The company has commissioned 77,000 tonnes of capacity at the greenfield VSF project at Vilayat in Gujarat. Work on the remaining two lines of 44,000 tonnes per annum to manufacture specialty fibre is in full swing. The remaining lines may go on trial in two months. Post this expansion, Grasim's total VSF capacity will be 498,000 tonnes per annum.
The chemical business volume grew 33 per cent, led by the production ramp-up at the Vilayat plant. The epoxy plant commissioned last year achieved break-even during this quarter. It will be fully ramped up in the next two quarters, it said.
The contribution of UltraTech Cement to the consolidated profit was down six per cent at Rs 378 crore (Rs 402 crore), while that of Idea Cellular increased 55 per cent to Rs 37 crore.
The company’s consolidated debt was at Rs 12,093 crore and net debt stood at Rs 6,167 crore.
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