Grasim Q1 net almost unchanged at R485 crore

07 Aug 2015

Aditya Birla Group flagship company Grasim Industries has reported a net profit of Rs485 crore for the fiscal first quarter ended 30 June 2015 almost unchanged from the Rs487 crore reported in the year-ago quarter.

Revenue for the quarter at Rs6,432 crore was up 7 per cent as compared to Rs6,032 crore in the corresponding quarter of the previous year.

Consolidated revenue of the company was up 7 per cent at Rs8,599 crore while earnings before interest, tax, depreciation and amortisation (EBITDA) was up 3 per cent at Rs1,531 crore.

Gross revenue increased by 15 per cent driven by higher sales volume at 103000 tonnes, up 19 per cent.

EBIDTA surged by 72 per cent at Rs139 crore, with expanded volumes and a decline in pulp and other input cost. Production at the newly commissioned Vilayat plant has ramped up. It achieved a capacity utilisation of around 82 per cent.

Volume growth would have been higher, had there been no plant stoppage at Nagda for two months due to the water shortage. Operations at Nagda resumed from the last week of June 2015.

In the chemical business, revenue soared by 17 per cent as epoxy volumes almost doubled with ramping up of plant utilisation. Caustic soda sales volume was maintained at 98000 tonnes. EBITDA increased by 3 per cent to Rs94 crore.

The merger scheme of Aditya Birla Chemicals India Ltd (ABCIL) with the company has been approved by the shareholders and creditors of both the companies. Post merger, the caustic soda capacity of the company will increase from 452,000 TPA to 804,000 TPA.

The scheme will be effective retrospectively from 1 April 2015 upon receipt of requisite regulatory approvals inter-alia from Competition Commission of India and high courts, expected by the third quarter of the current fiscal.

Therefore, the company's results do not include EBITDA of Rs78 crore and PAT of Rs20 crore reported by ABCIL for the current quarter.      

Grasim's subsidiary  Ultratech reported better performance amidst subdued demand in the cement sector due to slowdown in construction activities.

Its revenue for the quarter at Rs6,432 crore was up 7 per cent as compared to Rs6,032 crore in the corresponding quarter last year.

The combined cement and clinker sales volume was 13 million tonnes against 12.4 million tonnes last year. EBITDA stood at  Rs1,282 crore. (Rs1,296 crore) and net profit was Rs591 crore (Rs627 crore).

With the reduction in fuel prices and higher pet coke consumption, energy costs declined by 7 per cent. Its benefit was partially offset by the increase in railway freight. Input prices remained stable, except for the rise in royalty on limestone and levies under the Mines and Mineral (Development and Regulation) Amendment Act, 2015.

Grasim claims a leadership position in all its businesses, including cement, viscose staple fibre and chemicals and this has been further strengthened by investment of $4 billion over last five years.  The company is well poised to reap the benefits of these investments with ramping up of capacity utilisation and expected upturn in the business cycle led by accelerated growth in the economy.