The Hindu Business Line : Sponge iron unit drives Grasim net up 23 pc

AN impressive performance by its sponge iron business coupled with a general improvement in its other businesses has led Grasim report an increase of 23 per cent in net profit, at Rs 163.72 crore for the third quarter ended December 31, 2003.

The company had reported a net profit of Rs 132.93 crore for the corresponding quarter of the previous year.

Turnover for the quarter rose 14 per cent, to Rs 1,335 crore (Rs 1,167 crore). Total expenditure amounted to Rs. 1,016.46 crore (Rs 882.71 crore).

Profit before interest, depreciation and tax rose 14 per cent, to Rs 339.6 crore (Rs 298.1 crore).

Interest costs amounted to Rs 39.4 crore (Rs 40.5 crore) with depreciation at Rs 69.5 crore (Rs 63.2 crore).

Sales volumes of cement, the largest contributor to revenues, rose 9 per cent, with revenues rising 7.5 per cent. However, net realisations from cement fell 3 per cent; the white cement business decreased 4 per cent in sales volumes and was down 8 per cent in net realisation.

Capacity utilisation at Grasim's viscose staple yarn business rose 111 per cent during the quarter (109 per cent) with revenues from fibre and pulp rising 17.7 per cent, to touch Rs 486.41 crore and net realisation rising 2 per cent.

Sales volumes of sponge iron rose 3 per cent, with realisation rising a hefty 40 per cent, and revenues increasing 47 per cent, to Rs 157.59 crore.

The chemicals business rose around 7 per cent in volume terms with net realisations increasing 18 per cent.

The company's capital outlay for the cement division is Rs 306 crore towards modernisation and capacity expansion through debottelnecking and process improvement. Capacity is expected to increase to 13.5 mt by the end of the current financial year.

The company said its outlook "continues to remain bright, with its strong fundamentals, ongoing business restructuring, unrelenting thrust on operational excellence and cost reduction."

The outlook for the company's VSF has been described as bright, as for its sponge iron business too "the availability of natural gas and its pricing remaining an area of concern;" the upturn in the housing and infrastructure sector should augur well for its cement business, said a release from the company.