Press Release

30 Jul 2011

Grasim reports better performance for Q1FY2012

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Rs. crore
Consolidated net revenue
5,937 16%
Consolidated net profit
752 31%
Capex under Implementation
  VSF and Allied Chemicals

Consolidated Financial Performance:
Grasim Industries Limited, an Aditya Birla Group Company, today announced results for the 1st quarter ended 30th June 2011. The Company has recorded higher revenue and net profit led by better performance of both its businesses, VSF and Cement. Net Revenue at Rs.5,937 crore (Rs.5,119 crore) increased by 16 per cent. PBIDT grew by 19 per cent from Rs.1,464 crore to Rs.1,748 crore. Net profit was higher by 31 per cent at Rs.752 crore (Rs.575 crore).

Production and sales volumes:
Per cent change
Per cent change
Viscose Staple Fibre M.T.
Cement (Consolidated)* Mn M.T.
White Cement M.T.
*Including Star Cement volumes

Viscose Staple Fibre (VSF)
The textile industry witnessed a significant softening in prices of all fibres from their peak level as cotton prices declined sharply. The high inventory level in the value chain has resulted in lower demand.

Despite the challenging environment, revenue grew by 5 per cent aided by higher realisations. Higher margins and better performance from the Pulp JVs resulted in an enhanced operating profit. During the quarter, production was impacted due to the suspension of operations at Nagda because of water shortage. The plant resumed operations from 30th June, 2011 with the arrival of monsoons. The total shutdown has lasted for 27 days as against 55 days in the last year including 31 days in the corresponding quarter.

Cement Subsidiary (UltraTech Cement)
UltraTech Cement clocked in revenues of Rs.4,617 crore and PAT of Rs.669 crore. The quarter was adversely impacted by the 30 per cent increase in the domestic coal price in March, 2011.

Alongside, imported coal price rose by 30 per cent YoY resulting in a substantial escalation in costs. The domestic volumes were hit by the present economic slowdown and surplus scenario.

Chemical Business
Production grew by 5 per cent though operations were affected due to the water shortage at Nagda. Caustic prices moved upwards, driven by positive sentiments in the domestic and international markets.

Stand-alone Financial Performance
The standalone results for the quarter have also been impressive with Net Profit up by 40 per cent.
Rs. crore
Quarter ended
% Change
Net revenue
Net profit

VSF and Chemical Capex
The VSF expansion projects at Vilayat, Gujarat (120,000 TPA) and Harihar, Karnataka (36,500 TPA) are on track. Orders have already been placed for long delivery critical equipment. Civil work has commenced at both the locations and will be in full swing post monsoon. Both these projects are slated for commissioning in FY13. A total capex of Rs.2,450 crore has been earmarked for the VSF business. This comprises of Rs.2,100 crore for expansion projects and Rs.350 crore towards modernisation. The 182,500 TPA caustic soda project at Vilayat, Gujarat is progressing in line with the schedule.

Cement Capex
A total capex of Rs.11,000 crore has been slated for the cement business with Rs.5,150 crore on expansion projects and Rs.5,850 crore towards instituting bulk packaging terminals, setting up of ready-mix concrete plants, captive thermal power plant, modernisation etc.

At the Chhattisgarh and Karnataka brownfield expansions aggregating 9.2 million TPA, civil work has begun. Both these projects are expected to be operational by Q1FY14.

The environment in both the businesses has become very challenging. In VSF, the pressure is caused by correction in cotton prices and market conditions in China. With the onset of monsoons, cement prices have fallen amidst surplus scenario.

Grasim hopes that while the present scenario will improve gradually, the Company will be able to face the present challenges through its backward integration and cost leadership in VSF business and brand image, distribution network and operating efficiency in Cement business. Both VSF and cement will benefit from rising consumption as well as investment in India in the long term. Capacity expansions under implementation in these businesses will enable the Company to grow at a rapid pace and consolidate its leadership even further.

Cautionary Statement
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.

Contact Us

Media enquiries should be directed to: (Please use this contact for media enquiries only).

Dr. Pragnya Ram Group Executive President

Corporate Communications & CSR
Aditya Birla Management Corporation Private Limited
Aditya Birla Centre
1st Floor, 'C' Wing, S.K. Ahire Marg, Worli, Mumbai 400 030

Tel: 91-22-6652 5000 / 2499 5000
Fax: 91-22-6652 5741/ 42