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Grasim Industries, an Aditya Birla Group company, has reported 17 per cent fall in December quarter net profit at Rs 787 crore (Rs 952 crore), largely due to wider loss in its subsidiary Idea Cellular. The company’s net revenue was up 60 per cent at Rs 15,291 crore (Rs 9,577 crore).
The share of loss inherited by Grasim from Idea Cellular increased multi-fold in the December quarter to Rs 359 crore against a loss of Rs 18 crore logged in the same period last year. Grasim owns 28 per cent in Idea Cellular which is being merged with Vodafone India to take on intense competition from the latest entrant Reliance Jio.
Sushil Agarwal, Director and Group CFO, Grasim Industries, said the merger of Idea Cellular with Vodafone will be completed before the September-end deadline as it has received all regulatory approvals except for the clearance from the Department of Telecommunication.
Recent consolidation in the industry will bring more sanity and put brakes on mobile tariff war. With the combined strength of Vodafone and a total saving of about $10 billion, he said Idea is well placed to take on competition and the fall in Idea Cellular’s performance will be arrested, he said.
Even after Idea’s impact, Grasim’s consolidated EBITDA was up 44 per cent at Rs 2,696 crore (Rs 1,878 crore).
On a standalone basis, the company’s net profit was up 43 per cent at Rs 474 crore on better VSF and chemicals realisation. Revenue was up 62 per cent at Rs 4,428 crore and EBITDA was up 54 per cent at Rs 920 crore.
The company plans to enhance VSF production capacity at its Vilayat plant in Gujarat with an investment of Rs 3,523 crore and it is expected to be completed by FY21.The company will add additional EBITDA of Rs 185 crore per annum by managing the VSF business of Century Textiles for 15 years.
The company’s standalone surplus got reduced to Rs 607 crore from Rs 1,844 crore as it took over a debt of Rs 2,200 crore post the merger of Aditya Birla Nuvo with itself. On a consolidated basis, it has a debt of Rs 14,464 crore against surplus of Rs 2,023 crore logged in March-end.
Dilip Gaur, Managing Director, Grasim Industries, said the contribution of chemical business will also increase in coming days as the company has exported chlorine for the first time in many years as export prices firmed up.
Shares of the company were trading marginally up by 0.13 per cent at Rs 1,129.20 on the BSE.
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