Aditya Birla Group company Grasim Industries today reported a 13 per cent dip in consolidated net profit at Rs 2,397 crore for the year ended March 31, compared to Rs 2,745 crore in the previous year. Net sales rose seven per cent to Rs 21,585 crore from Rs 20,195 crore.
For the quarter ended March, consolidated net profit rose 35 per cent to Rs 865 crore, compared to Rs 640 crore, while net sales were up 19 per cent at Rs 6,502 crore, compared to Rs 5,474 crore.
“Improved performance from the Viscose Staple Fibre (VSF) business, whose quarterly sales were the highest during the year, was a major driver. The cement business also reported improved performance,” said the company in a statement.
Shortage of cotton continued to drive prices of all textile fibres, including VSF. High spot pulp prices helped the company post better performance in the March quarter.
The company expects VSF demand to grow five to six per cent in the long term. “However, profitability in the short term will be governed by the prices of competitive fibres, input and energy costs. Cotton production in the forthcoming season will be the key influencing factor,” said Grasim.
The cement business, which accounted for more than two-thirds of the company’s revenues, remained under pressure because of lower infrastructure spending, slowdown in realty sector and non-availability of railway wagons. Cement sales during the quarter grew seven per cent.
The company expects the cement industry to grow 8.5 per cent in 2011-12. But it said, “Around 88 million tonnes of capacity has been added over the last two years, resulting in a surplus scenario, which may last for the next eight to 10 quarters. The pricing environment remains challenging due to surplus capacity. Margins may continue to remain under pressure.”
On the Bombay Stock Exchange, Grasim shares closed flat at Rs 2,361.95, while UltraTech stocks were marginally down at Rs 1,045.10.