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Grasim Industries, an Aditya Birla Group company, reported a marginal increase in December quarter net profit at ₹334 crore against ₹332 crore in the same period last year due to lower realisation. Net sales were up 13 per cent to ₹8,036 crore (₹7,117 crore).
While the company’s viscose staple fibre (VSF) production was up 15 per cent at 1.05 lakh tonnes, sales were almost flat at 97,001 tonnes against 97,049 tonnes logged in last year.
Costlier financeNet revenue from VSF business was down 4 per cent at ₹1,203 crore (₹1,250 crore) and the profit before interest and tax dipped 25 per cent at ₹98 crore (₹131 crore). Finance cost was up 49 per cent at ₹186 crore (₹125 crore).
Realisation in VSF business slipped 4 per cent due to excess supply in the market coupled with fall in cotton prices, putting pressure on VSF pricing.
The company expects realisation to remain under stress in the near term as no revival is seen in cotton and polyester prices. It foresees closure of unviable units and consolidation in China to help stabilising the sector.
In January, Grasim commissioned the third line of VSF production of 21,900 tonnes a year at Vilayat, Gujarat, taking its total production capacity to 4.76 lakh tonnes a year.
Production improvesProduction of chemicals improved 40 per cent to 1.06 lakh tonnes due to fresh capacity at Vilayat.
Sales volume was up 37 per cent to 1.06 lakh tonnes, while profit before tax was up 5 per cent at ₹44 crore. Cement business’ contribution to Grasim profitability was up 2 per cent at ₹240 crore (₹234 crore), while that of Idea Cellular increased 38 per cent to ₹33 crore.
Grasim’s consolidated debt was at ₹12,758 crore in the first nine months of this fiscal against ₹9,681 crore registered in March 2014. Net debt was at ₹6,915 crore (₹3,442 crore).
On a standalone basis, net profit was down 26 per cent at ₹94 crore and sales were up 6 per cent at ₹1,543 crore (₹1,456 crore).
On Friday, Grasim shares closed 1.20 per cent lower at ₹3,882.05, on the BSE.
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