The Hindu Business Line : Grasim rides on all-round performance; net up 68%

GRASIM Industries has reported a 67.9 increase in net profit (after tax but before exceptional items) for the third quarter ended December 31, 2002. The company its results have been "on the back of improved performance from all its businesses." Net profit stood at Rs. 134.1 crore against Rs. 79.9 crore.

The revenue growth was led by the fibre and pulp business, which grew 23 per cent with revenues from cement increasing only 9.4 per cent.

If exceptional items (on account of loss on closure and sale of plants are considered), the net profit of the third quarter of the previous year amounts to Rs 89.9 crore, bringing down growth during the quarter under consideration to 48 per cent.

Increase in stock, lower interest cost and lower purchase of finished goods contributed to a better bottomline as well, with total expenditure increasing only 2.8 per cent.

The cement business clocked the largest revenue among the revenue segments, although it grew only 9.4 per cent, contributing Rs 545.46 crore (Rs. 498.44 crore).

Cement production grew 20 per cent during the quarter, sales volumes growing 13 per cent, this impact neutralised by realisation falling six per cent in keeping with the trend in the cement industry.

The fibre and pulp division grew 23.3 per cent, to Rs 413.12 crore (Rs 334.85 crore); sponge iron contributed Rs 109.77 crore, up from Rs. 74.21 crore. VSF capacity utilisation was up 109 per cent, volumes higher by 21 per cent, and realisation too up by three per cent.

Grasim said its outlook is "bright" with the company focussing on cost optimisation, financial management and the improvement in the cement sector.

Net sales for the nine months ended December 31, 2002, showed a 4.2 per cent increase, from Rs 3,275 crore to Rs 3,414 crore; net profit showed a 64 per cent increase, from Rs 223.73 crore from Rs 367.09 crore. The company will incur a "loss on sale of investments" of Rs 208.62 crore if its sale of shares in Mangalore Refineries and Petrochemicals Ltd to ONGC happens during the financial year.

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