Grasim Inds` Q1 net flat, Ambuja`s down 34%
Ambuja Cements and Grasim Industries, the country’s third and fourth largest cement makers respectively, reported a dismal performance in the quarter ended June 2008. The two companies succumbed to rising input costs, cap on cement price hikes and an economic slowdown.
Grasim Industries, a part of the Aditya Birla group, reported consolidated net profit of Rs 672 crore for the period compared to Rs 670 crore in the corresponding quarter last year, up marginally by 0.3 per cent. Its net sales grew from Rs 4,060 crore to Rs 4,430 crore, up 9 per cent.
On the other hand, the net profit of Ambuja Cements, a part of the Swiss cement major Holcim, dipped by over 34 per cent to Rs 577 crore from Rs 877.75 crore in the June quarter last year. The company’s net sales during the period increased to Rs 1,569.77 crore from Rs 1,464.36 crore last year, up 7.2 per cent.
Grasim, which has a presence in viscose fibre, cement, chemical and sponge iron, said the company performed satisfactorily due to the general economic slowdown and spiralling prices.
The viscose staple fibre business of Grasim remained muted. Production was curtailed due to lower off-take. Margins too were depressed as the prices of sulphur, pulp and caustic remained high. The company said that margins are likely to remain under pressure in the short to medum term. The chemical division performed better with higher realisation.
Cement, the main business of Grasim, posted a moderate performance with marginal high sales volumes. “The continuous rise in coal prices along with higher freight and packing costs has led to decline in operating margins (in cement),” the company said in a statement.
| SLACK SEASON Showing Q1 performance of Grasim and Ambuja | |||
| Ambuja Cements | |||
| Q1FY08 | Q1FY09 | Change (%) | |
| Net Profit | 877.75 | 577.02 | -34.26 |
| Net Sales | 1464.36 | 1569.77 | 7.20 |
| Grasim | |||
| Q1FY08 | Q1FY09 | Change (%) | |
| Net Profit | 670.00 | 672.00 | 0.30 |
| Net Sales | 4060.00 | 4430.00 | 9.00 |
Ambuja Cements, one of the main exporters of cement, could not see better realisations as the export ban on the commodity led to surplus availability in Gujarat. The company has a manufacturing capacity of 18.5 million tonnes and plans to take this to 27 million tonnes in the next two years.
The shares of Ambuja Cements closed at Rs 82.10 on the Bombay Stock Exchange on Friday, down 1.2 per cent, whereas Grasim firmed up to Rs 1,842.95, up 0.7 per cent.