04 May 2013
Grasim sees marginal increase in net profit
Aditya Birla Group firm reports net profit at Rs.818 crore in Jan-Mar, up 1% from a year ago
Grasim Industries Ltd, an Aditya Birla Group firm, reported a marginal increase in net profit in the January to March quarter as well as in the full 2012-13 fiscal despite a difficult business environment.
Grasim reported net profit at Rs.818 crore in the January-March quarter, up 1% from the Rs.809 crore reported in the same period a year ago.
Net revenue came in at Rs.7,672 crore in the quarter, up 5% from the Rs.7,283 crore reported a year ago.
In the full 2012-13 year ended March 31, net profit stood at Rs.2,704 crore, up 2% from the Rs.2,647 crore a year ago.
Net revenue for the full year was Rs.27,904 crore, up 11% from Rs.25,245 crore reported a year earlier.
The company said it was looking forward to higher sales volumes in the quarters ahead with expansions under way.
“Our cement and VSF (viscose staple fibre) businesses, both are focused on domestic front. In the cement industry, demand has grown 4.5% and in VSF, demand has grown 5%,” Adesh Gupta, wholetime director and chief financial officer of Grasim, said. “And the fortune of cement is very closely linked to the economic growth.”
Grasim, incorporated in 1947, started as a textile manufacturer and later diversified into VSF and cement that contribute a major portion to the company’s revenue. It is also present in chemicals such as caustic soda.
“The quarter witnessed continuing pressure on input and logistics cost, given the increase in railway freight and the hike in diesel prices, though there was some relief on account of the softening in prices of imported coal,” a company statement said.
Gupta said in 2012-13 coal prices fell by 8%.
A stock analyst said Grasim’s results were satisfactory. “The performance looks far better than the numbers represent simply because the environment has been very challenging,” said Arun Kejriwal, director at research firm KRIS. “Going forward, things should improve for Grasim as new capacities come on stream sometime during this year and the next.”
On Friday, shares of Grasim ended on BSE at Rs.2,950.05, down 0.25% from the previous day. The Sensex closed at 19,575.64 points, down 0.81% from the previous day.
In the quarter under review, the company made several expansions. Its brownfield VSF expansion at Harihar in Karnataka was completed with the commissioning of phase II (18,250 tonnes per annum); the greenfield project of VSF (120,000 tonnes per annum) at Vilayat in Gujarat is nearing completion and is expected to go on stream in the second quarter.
The company’s cement unit, UltraTech, is implementing projects across locations. The company’s Aditya Cement Works in Rajasthan is being expanded by 2.90 million tonnes per annum, which also envisages a plan outlay of Rs.2,000 crore. The additional capacity is expected to be commissioned by March 2015.
Gupta said in the current fiscal the company planned to spend Rs.5,200 crore, including on Aditya Cement.