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Grasim Industries, an Aditya Birla Group company, reported that its net profit was down 40 per cent in the December quarter to Rs 332 crore (Rs 549 crore) due to higher cost and lower realisation across its business which includes viscose staple fibre, cement and chemicals.
The company’s sales improved five per cent to Rs 7,067 crore (Rs 6,729 crore). The total expenses increased 9.4 per cent to Rs 6,450 crore (Rs 5,892 crore).
On a standalone basis, the net profit was down 32.33 per cent at Rs 176 crore (Rs 260 crore) while sales were up 20 per cent at Rs 1,456 crore (Rs 1,216 crore).
During the quarter, the company commissioned its Epoxy manufacturing facility at Vilayat, Gujarat. The operation at the caustic soda plant, which was affected due to damage caused by floods in September, has resumed production, said the company.
The performance was constrained due to subdued economic conditions, it said.
Supported by increased capacity at Harihar, VSF production increased four per cent to 91,818 tonnes while sales volume was up 24 per cent at 97,049 tonne, led by better demand. The company expects to commission 1,20,000 tonnes VSF plant in the fourth quarter of this fiscal.
The company maintained realisations, despite sharp fall in the international prices due to rupee depreciation. The input costs have gone up due to the increase in pulp prices coupled with rupee depreciation.
Production of pulp was affected on account of planned maintenance shutdown. The anti-dumping duty levied by China impacted realisations and the volumes of pulp sold by the joint venture company. Realisations in chemical business were almost flat while the production in Gujarat was affected due to floods. However, sales volume in chemical business improved 14 per cent.
The contribution from cement business to operating profit was down 22 per cent to Rs 928 crore (Rs 1,189 crore) as sales remained flat at Rs 5,172 crore (Rs 5,164 crore). VSF’s operating profit was down 10 per cent at Rs 169 crore (Rs 188 crore).
The company expects cement sales to improve post-general election while VSF demand to depend on international trends. The commissioning of major projects would improve volume and profitability, it said.
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