The Hindu Business Line : Grasim Ind Q1 net rises 24 pc to Rs 312 cr; revenues up 21 pc

Growth drivers
Apart from higher selling prices of cement, a higher share of blended cement and an optimisation of rail-road mix that reduced freight costs, helped improve margins.
The VSF business reported an 8 per cent rise in realisations although capacity utilisation was lower at 70 per cent (82 per cent) due to a plant shutdown for 45 days, occasioned by water shortage,

Mumbai , July 29

Grasim Industries has announced a 24 per cent growth in standalone net profit for the first quarter ended June 30, 2006. The growth was driven by cement and viscose staple fibre businesses, which reported higher realisations.

Net profit for the quarter rose to Rs 312 crore from Rs 251 crore in the corresponding year-ago quarter. Revenues rose 21 per cent to Rs 1,877 crore (Rs 1,553 crore). The total expenditure grew by 16 per cent to Rs 1,364 crore (Rs 1,179 crore).

The interest costs reduced to Rs 23.5 crore (Rs 26.5 crore). The gross profit amounted to Rs 527 crore (Rs 413 crore) rising by 27.6 per cent. The tax expenses were higher by 53 per cent at Rs 141 crore.

Cement sales

Volume sales of cement rose 5 per cent, while realisations surged by 36 per cent to Rs 2,731 per tonne with operating margins almost doubling, said Mr D.D. Rathi, whole-time Director and Chief Financial Officer, at a news briefing here on Saturday. The capacity utilisation of this segment was 109 per cent.

Apart from higher selling prices of cement, a higher share of blended cement and an optimisation of rail-road mix that reduced freight costs, helped improve margins.

The VSF business reported an 8 per cent rise in realisations although capacity utilisation was lower at 70 per cent (82 per cent) due to a plant shutdown for 45 days, occasioned by water shortage, said Mr Rathi.

The sponge iron and caustic soda segments reported negative realisations but the impact was overcome by the VSF and cement segments, which account for 92 per cent of the company's business.

The company's consolidated net profit rose 47 per cent to Rs 435 crore (Rs 296 crore), while net revenues rose 29 per cent to Rs 3,196 crore (Rs 2,474 crore).

Grasim shares gained Rs 43.15 over Friday to close at Rs 2,117.50, up by 2.08 per cent over the previous day's close.