Aditya Birla Group firm Grasim Industries will spend more than Rs 4,000 crore on capacity expansion of its various businesses — cement, chemicals and VSF — in the coming financial year.
Grasim Industries is engaged in the manufacturing of Viscose Staple Fibre (VSF) — used in apparels — and cement, which account for over 90 per cent of its revenues. The firm had clocked a turnover of around Rs 32,838 crore in the 2014-15 fiscal.
While the company will invest Rs 3,800 crore on its subsidiary, cement maker Ultratech, in 2016-17 fiscal, it will pour in Rs 255 crore in its VSF and chemicals business during the same period.
The company had earmarked Rs 2,140 crore for Ultratech in this fiscal, of which Rs 1,630 crore was spent during the April-December period on capacity expansion, logistic infrastructure, modernisation, upgradation and its ready mixed concrete business.
On the VSF and chemicals business, the firm had earmarked Rs 450 crore for 2015-16 fiscal, of which it had spent Rs 310 crore in the first nine months of the financial year, Grasim said in a regulatory filing.
The firm said it will spend Rs 4,055 crore on capex in the 2016-17 fiscal onwards against 2,590 crore in 2015-16 and Rs 6,645 crore till March 2015, it added.
For the October-December quarter of this fiscal, Grasim Industries said all its businesses — VSF, Chemical and Cement — posted encouraging results and investments made on capacity expansions and acquisitions are yielding results.
Its total income rose to Rs 9,044 crore in the December quarter from Rs 8,035 crore during the same quarter in 2014-15. It had posted a net profit of Rs 650 crore against Rs 334 crore during the quarter under review.
Going ahead in the VSF segment, the firm said it will continue to focus on expanding its domestic market through product development activities, working closely with brands, designers and retailers.
In the case of cement, the demand is expected to pick up in the near term with the government’s focus on infrastructure development, housing sector, smart cities, roads, among others and the firm is well positioned across the country to cater to the growth in demand.