14 Feb 2018
Grasim results for Q3 ended 31 December 2017
||Rupees in crore
Grasim has announced results for the quarter ended 31 December 2017 reporting significant growth both at standalone and consolidated levels. Standalone PAT for the quarter at Rs.474 crore was up by 43 per cent compared to Rs.331 crore in Q3FY17.
Consolidated PAT, before share in profit/loss of joint ventures (JVs) and Associates and minority interest, at Rs.1,125 crore, grew by 22 per cent YoY. Reported consolidated PAT (including share in profit/loss of JVs & Associates and after minority interest) for the quarter at Rs.543 crore is lower compared to Q3FY17 (Rs.717 crore), mainly on account of share of the Company in the net loss of Idea Cellular Limited, an Associate of the Company.
The previous year’s financial results do not include the results of the erstwhile Aditya Birla Nuvo Limited (ABNL) as ABNL merged with the Company with effect from 01 July 2017, hence not comparable.
The domestic VSF market demand remained buoyant with sales volume up by 9 per cent YoY in Q3FY18.
Net revenue is up 24 per cent YoY to Rs.2,186 crore for Q3FY18 on the back of higher volumes and better realisation. EBITDA at Rs.462 crore is up 15 per cent YoY in Q3FY18.
To tap the strong demand growth of VSF and maintain its leadership position, Grasim has committed a fresh capex of Rs.3,523 crore for capacity expansion. Coupled with the existing expansion plan at a cost of Rs.802 crore, the total capacity will increase by 58 per cent to 788 KTPA.
Pursuant to the agreement for the ‘Right to Manage & Operate’ VFY business of Century Textiles & Industries Ltd. for a period of 15 years, Grasim has commenced operations from 01 February 2018.
The uptrend in domestic caustic soda prices continued in the current quarter, driven by supply related issues in China and Europe and robust demand from major consuming segments (Alumina and Textile).
Net revenue saw a phenomenal rise 42 per cent YoY to Rs.1,311 crore led by higher sales volume and realisation. EBITDA is up 93 per cent YoY to Rs.359 crore. The management focus on increasing the volume of chlorine based value added products continues.
The brownfield expansion of 144 KTPA caustic soda at Vilayat, Gujarat is expected to be commissioned by March 2018.
Cement subsidiary - UltraTech
UltraTech reported an increase in net revenue (consolidated) by 34 per cent (YoY) to Rs.8,019 crore and EBITDA by 17 per cent to Rs.1,494 crore in the current quarter.
The performance of the acquired cement assets witnessed considerable improvement in all operational parameters with the exit capacity utilisation for Q3FY18 at 60 per cent. UltraTech has successfully launched its ‘UltraTech Brand’ and realised brand premium across new markets of the acquired assets.
Financial services subsidiary – Aditya Birla Capital Limited (ABCL)
ABCL (formerly known as Aditya Birla Financial Services Limited) was listed on the stock exchanges on 01 September 2017 as the culmination of the composite scheme of arrangement. Under it ABNL merged with the Company and the financial services undertaking was subsequently demerged into ABCL.
ABCL reported a robust financial performance for Q3FY18 with a consolidated revenue of Rs.3,325 crore and EBT of Rs.409 crore as per IGAAP (The Company’s results include revenue of Rs.2,850 crore and EBT of Rs.267 crore as per IND AS).
The NBFC Lending book (Incl. housing) rose by 41 per cent YoY to reach an all-time high of Rs.46,522 crore in Q3FY18.
The Total Assets Under Management rose to highest ever level of Rs.2,99,893 crore1 up by 31 per cent YoY in Q3FY18.
The VSF business will continue to focus on expanding the market in India by partnering with the textile value chain, achieving better customer connect through brand Liva and enriching the product mix through a larger share of specialty fibre. The new capacities likely to come on stream in China may impact the global VSF prices in the near term.
The demand for caustic soda in India is expected to grow with rising consumption from the Alumina and Textile sectors.
In Cement, Government spending on infrastructure, rural and affordable housing will be the key demand drivers. The Company is well positioned across the country to cater to this growth in demand.
In Financial Services, ABCL is geared to provide universal financial solutions to meet the customers’ money need for life.
Statements in this “Press Release” describing the Company’s objectives, projections, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities law and regulations. Actual results could differ materially from those express or implied. Important factors that could make a difference to the Company’s operations include global and Indian demand supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statement, on the basis of any subsequent development, information or events, or otherwise.
Note: 1Includes AUM of Life Insurance, Health Insurance, Private Equity and quarterly AAUM of Asset Management business