The Hindu Business Line : Grasim Q4 net profit down 19 pc on higher expenses

HIGHER expenses and Rs 57.7 crore charged towards fall in value of investments has led to a 19-per cent drop in Grasim Industries' fourth quarter net profit.

Net profit for quarter ended March 31, 2005 was down at Rs 229.52 crore (Rs 25.03 a share), compared with Rs 282.07 crore ( Rs 30.76 a share) in the year-ago period.

Grasim said it will make investments of Rs 1,625 crore over the next two years.

Mr D.D. Rathi, Grasim's Whole-time Director, told reporters on Friday that this would include Rs 920 crore to be spent on UltraTech Cement (erstwhile L&T Cement), acquired during the financial year.

Fourth quarter net sales increased 6 per cent to Rs 1,642 crore (Rs 1,553.21 crore) while other income was up to Rs 82.48 crore (Rs 72.06 crore).

Interest payments were down to Rs 33.94 crore (Rs 35.06 crore), while depreciation was Rs 72.45 crore (Rs 68.19 crore).

Net profit for the financial year ended March 31, 2005 was up 14 per cent to Rs 885.71 crore (Rs 779.26 crore). Net sales jumped 19 per cent to Rs 6,247.07 crore (Rs 5,233.27 crore).

Cement profits were lower because of steep rise in fuel and packaging costs while viscose staple fibre was affected by lower volumes, Mr Rathi said.

During the year, Grasim spent more than Rs 500 crore on paying of high-interest loans held by UltraTech Cement.

The company hopes to improve UltraTech's profitability in the coming one-and-a-half years, he said.

In the coming fiscal, Grasim will spend Rs 504 crore, of the Rs 920-crore earmarked, for its cements business, Rs 290 crore (out of Rs 602 crore) on its viscose staple fibre business.

It will also invest in its sponge iron (Rs 29 crore), chemicals (Rs 27 crore) and other businesses (Rs 47 crore).

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