Grasim turns corner, posts net profit of Rs 1,473 cr in Q2

Grasim industries , an Aditya Birla group company, has reported a net profit of Rs 1,473 crore in the quarter ended September 30, against a net loss of Rs 1,320 crore logged in the same period last year, on the back of a deferred tax write-back of Rs 448 crore.

Revenue from operations was up three per cent at Rs 18,431 crore (Rs 17,892 crore).

The company's profit in the previous September quarter was impacted by a write-down of Rs 2,277 crore towards învestment in Voda Idea Cellular.

On a standalone basis, the company reported a net profit of Rs 526 crore, against a net loss of Rs 1,187 crore registered in same period last year.

Standalone revenue was down six per cent at Rs 4,797 crore (Rs 5,118 crore) due to weak global prices of VSF and caustic soda.

Viscose Staple Fibre production and sales volume recorded an increase of 8 per cent and 5 per cent at 1,48,000 tonnes and 1,42,000 tonnes, respectively.

Global prices of VSF softened further on account of significant capacity additions in China and Indonesia in the last one year, and the ongoing US-China trade war. Indian VSF prices were down by 23 per cent, following Chinese VSF prices.

The benefit of falling input costs, such as pulp prices, will get reflected in the coming quarters due to the inventory time lag, the company said.

Caustic soda sales were impacted by weak demand from the user industry, capacity addition in the domestic market and increased imports which hit production, it added.

The company has entered into a joint venture with Maschinenfabrik Reinhausen GmbH of Germany for the manufacture and sale of Composite Hollow Core Insulators used in the Power Transmission and Distribution industry globally. Aditya Birla Power Composites, the new joint venture company, will set up a modern CHCI manufacturing plant at Halol in Gujarat, bringing the latest technology from Europe.

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