| Grasim Industries Ltd, the flagship company of the Aditya Birla Group, has posted a 14.6 per cent rise in its net profit at Rs 250.95 crore in the first quarter ended June 30, 2005, compared with Rs 219.17 crore recorded for the same quarter of the previous fiscal.
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| The company's total income rose 5.57 per cent to Rs 1,618.77 crore for the reporting quarter from Rs 1,533.34 crore in the year-ago period, Grasim Industries said in a release.
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| On a consolidated basis, the company’s net profit went up by 33.19 per cent to Rs 296.1 crore from Rs 222.3 crore. Net revenue grew 55.7 per cent to Rs 2495.3 crore from Rs 1602.1 crore. The consolidated figures include the financial numbers of UltraTech Cement and its subsidiaries.
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| Grasim’s business posted a strong performance with a cement production of 3.35 million tonne, up by 12 per cent over the corresponding quarter of previous fiscal. The sale of the cement division rose 10 per cent to 3.34 million tonne. Realisations at Rs 2,019 per tonne reflected a 4 per cent hike over the corresponding quarter of previous quarter.
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| The company’s cement business has envisaged a total capital outlay of around Rs 946 crore towards modernisation, capacity expansion, de-bottlenecking and an increased power plant capacity.
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| Grasim’s VSF business saw a subdued performance during the quarter, with capacity utilisation lower at 82 per cent as against 94 per cent in the corresponding quarter a year ago.
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| Sales volumes and realisations of VSF business were down by 13 per cent and 5 per cent, respectively, due to the increased availability and usage of cotton at lower prices. Margins were under pressure as input costs, particularly that of chemicals, registered a sharp rise.
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| The company intends to concentrate on growing its VSF business through value added new products and application development, apart from “aggressively branding the product for its feel, comfort and fashion”.
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| The company has embarked on capacity expansion and modernisation programmes at its VSF plants, involving a total capital outlay of over Rs 533 crore. Grasim expects this to help it increase its VSF capacity to 312 lakh tonne per annum.
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| The company, along with overseas group companies, is in the process of acquiring St Anne Nackawic Pulp Mill in Canada in joint venture with Tembec, Canada, the leading integrated forest products manufacturer in North America and France.
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| The mill is likely to recommence its operations from the third quarter of FY’06. Further, as a part of this strategy and to reinforce its competitive edge in the cellulosic manmade fibre sector, Grasim also plans to set-up fully integrated operations, virtually from the ‘Forest to the Fabric’ stage are on the anvil.
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| Towards this end the company intends setting up greenfield plants globally.
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| The outlook of the business continues to be positive due to expected gains in post MFA era, quota abolition, planned VSF capacity expansion and augmenting of captive pulp supply thru global plants. |
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