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Grasim Industries, an Aditya Birla Group company, has reported that its net profit was down 18 per cent for the December quarter at Rs 549 crore (Rs 669 crore) because of a sharp fall in demand for viscose staple fibre (VSF). Net sales were up seven per cent at Rs 6,717 crore (Rs 6,258 crore).
On a standalone basis, the company’s net profit was down 28 per cent at Rs 198 crore (Rs 274 crore) while net sales dipped three per cent to Rs 1,204 crore (Rs 1,243 crore).
The company’s VSF production was up five per cent at 88,297 tonnes (84,233 tonnes), while sales volume was almost flat at 78,579 tonnes (78,216 tonnes). Revenue from VSF business was down five per cent at Rs 1,030 crore (Rs 1,084 crore).
Market conditions for the textile industry, the key consumer of VSF, continued to remain challenging. This was compounded by the surplus VSF capacity in China and depressed cotton prices. Higher caustic prices coupled with lower realisation, have led to pressure on margins.
AV Terrace Bay, the Canada-based pulp manufacturing company, commenced operations in October. Its losses are expected to be reduced and converted into profit in a phased manner through mill upgradation and cost optimisation, the company said. Grasim holds 40 per cent in AV Terrace Bay.
Caustic and chlorine production in the quarter was flat at 69,210 tonnes (68,741 tonnes) while sales volume was down four per cent at 68,115 tonnes (71,232 tonnes). However, the chemical business recorded 12 per cent raise in revenue at Rs 236 crore (Rs 210 crore) due to higher ECU (Electro Chemical Unit) realisation.
Cement business contribution to the net profit of Grasim was up two per cent at Rs 367 crore (Rs 361 crore). Subdued demand and an addition of 21 million tonne capacity in the last nine months to 340 million tonnes per annum, impacted the profitability of UltraTech Cement, the subsidiary of Grasim. UltraTech’s net profit was down three per cent to Rs 601 crore due to sharp increase in operational cost.
Shares of Grasim Industries were down one per cent at Rs 3,007 on Thursday.
> Suresh.iyengar@thehindu.co.in
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