Grasim Q1 net falls over 15% to Rs610 crore

Aditya Birla group company Grasim Industries Ltd has reported a 15.04 per cent decline in its consolidated net profit for the first quarter of the current financial year, at Rs610.01 crore.

The company had posted a consolidated net profit of Rs718 crore during the comparable quarter of the previous financial year, Grasim Industries said in a filing with the Bombay Stock Exchange (BSE).

Revenue for the first quarter of the financial year ended 30 June 2013 stood at Rs6,940 crore, against Rs7,672 crore in the first quarter of FY'14.

Profit before interest, depreciation and taxes (PBIDT) for the April-June 2013-14 quarter stood at Rs1,549 crore, the company said.

Grasim Industries' consolidated sales of viscose staple fibre was 77,518 million tonnes while net revenue stood at Rs980 crore. The company said VSF prices remained under pressure due to overcapacity in China.

Combined cement and clinker sales volume during the quarter was 10.88 million tonnes. Net revenue stood at Rs5,294 crore against Rs5,362.20 crore in first quarter of the previous year. The quarter witnessed an increasing trend in logistics and raw material cost, linked to increase in railway freight and diesel prices, Grasim said.

Consolidated revenue from chemicals division was Rs224.27 crore for the quarter against Rs239.33 crore in the same period of the last financial year.

''Given the prevailing global economic conditions, coupled with the surplus capacity in China, the VSF industry continues to face a challenging environment in the immediate term,'' the Company said.

Grasim expects cement demand to grow by 6 per cent in FY'14 due to the slowdown in GDP growth rate. It has the potential to recover to over 8 per cent with the improvement in the economic environment, the company noted.

''Capacity expansions in VSF and cement will provide additional volumes, driving growth and further consolidate the company's leadership. This will enable the company to move forward rapidly, with the recovery in the market.

''The company will continue to focus on cost reduction measures, improving asset productivity to maintain its position as the lowest cost producer and expanding speciality products portfolio for sustained shareholder value creation,'' Grasim Industries added.