Grasim Q1 net profit down 20% at Rs487 crore
02 Aug 2014
Aditya Birla Group company Grasim Industries Limited has reported an after-tax (net) profit of Rs487 crore for the fiscal first quarter ended 30 June 2014, a decline of 20 per cent from the Rs610 crore net profit recorded in the first quarter of the previous financial year.
Consolidated revenues of the company recorded a healthy volume growth leading to 16 per cent increase in revenue to Rs8,044 crore, from Rs6,938 crore in the corresponding quarter of the previous financial year.
Net sales were up 16 per cent at Rs7,976 crore (Rs6,893 crore) while profit before interest, depreciation and taxes (PBIDT) stood at Rs1,488 crore (Rs1,549 crore).
Consolidated profit margins were hit due to pricing pressure in both the viscose staple fibre and cement business given the current over-capacity in these sectors, the company said in a release.
Interest and depreciation has gone up with the commissioning of the various projects, the full benefits of which will be available in a gradual manner.
Grasim said the tax charge was also higher due to lower exempt income and recent changes in the tax laws. Last year, the company had benefit of commissioning of the power projects.
Grasim saw its finance cost go up 33 per cent to Rs126 crore and depreciation increasing four per cent to Rs358 crore. The company said, interest and depreciation cost went up with the commissioning of the various projects.
Tax charges were also higher due to lower exempt income and recent changes in tax laws.
On a standalone basis the company's net profit was down 53 per cent at Rs106 crore, while net sales were up 24 per cent at Rs1,424 crore.
VSF sales were up 11 per cent at 86,389 tonnes, while production grew two per cent to 89,827 tonnes.
Revenue from the VSF business was up 12 per cent at Rs1,094 crore as realisations globally remained subdued owing to overcapacity in China. Profit before interest and tax was down 64 per cent at Rs54 crore as margins dipped to seven per cent from 19 per cent in the same period last year.
The company has commissioned 77,000 tonnes of capacity at the greenfield VSF project at Vilayat in Gujarat.
Work on the remaining two lines of 44,000 tonnes per annum to manufacture specialty fibre is in full swing.
The remaining lines may go on trial in two months. Post expansion, Grasim's total VSF capacity will be 498,000 tonnes per annum.
The chemical business volume grew 33 per cent, led by the production ramp-up at the Vilayat plant. The epoxy plant commissioned last year achieved break-even during this quarter. It will be fully ramped up in the next two quarters, it said.
The contribution of UltraTech Cement to the consolidated profit was down six per cent at Rs378 crore (Rs402 crore), while that of Idea Cellular increased 55 per cent to Rs37 crore.
The company's consolidated debt was at Rs12,093 crore and net debt stood at Rs6,167 crore.
