Companies

Grasim Q2 net rises 3% to ₹1,521 crore on lower cost

Our Bureau Mumbai | Updated on November 12, 2020

Dilip Gaur, Managing Director

Grasim Industries, an Aditya Birla Group company, has reported a three per cent increase in September quarter consolidated net profit at ₹1,521 crore against ₹1,473 crore, on the back of lower cost.

Income was almost flat at ₹18,601 crore (₹18,616 crore). Overall expenses were down four per cent at ₹16,411 crore (₹17,039 crore).

Compared to June quarter the net profit nearly trebled while revenue was 33 per cent.

Exceptional income

The company has recorded a one-time exceptional income of ₹360 crore in revaluation of asset held for sale by its subsidiary.

The economy has been on the recovery path post relaxation of Covid induced lockdown. It has been a resilient September quarter for Grasim due to strong recovery in demand and the government working to support home-grown businesses by injecting doses of fiscal and monetary stimulus on a timely basis, said the company.

The textile markets in India and overseas are witnessing a turnaround with Covid-related restrictions being phased out by the respective governments. The unlock measures across the country have led to a steady increase in consumer spending, which is expected to get further uplifted with the onset of festive season. The export of Indian textile products by value has also recovered post a sharp downturn in June quarter .

The capacity utilisation of the VSF business touched 88 per cent in September quarter from 26 per cent in June quarter and recorded near 100 per cent capacity utilisation by September end.

The steadily widening gap between cotton and viscose prices has also led to a shift in favour of viscose, thus contributing to further growth in demand for viscose.

The chlorine derivatives products demand remained strong driven by higher sales of hygiene products and disinfectants, organic intermediates, agrochemicals and caustic product segment.

The caustic soda production staged a strong recovery in volumes during the quarter, the capacity utilisation improved to 80 per cent in Q2FY21 from 49 per cent in Q1FY21 with end use industries also witnessing recovery in their demand, though prices fell sharply.

The company has approved an additional capex of ₹237 crore for chemical and viscose fibre yarn business taking the overall capex for this fiscal to ₹1,852 crore.

Published on November 12, 2020

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