Grasim Industries drops after Q4 earnings

Grasim Industries lost 0.5% to Rs 2,612 at 9:20 IST on BSE after consolidated net profit after minority interest (before exceptional item) rose 11% to Rs 679 crore on 10% growth in revenue to Rs 8419 crore in Q4 March 2014 over Q4 March 2013.

The Q4 result was announced after market hours on Friday, 2 May 2014.

Meanwhile, the S&P BSE Sensex was down 9.97 points or 0.04% at 22,393.92.

On BSE, so far 287 shares were traded in the counter as against average daily volume of 5,486 shares in the past one quarter.

The stock hit a high of Rs 2611 and a low of Rs 2600 so far during the day. The stock had hit a 52-week high of Rs 3,159 on 20 May 2013. The stock had hit a 52-week low of Rs 2,121 on 4 September 2013.

The stock had underperformed the market over the past one month till 2 May 2014, sliding 7.1% compared with the Sensex's 0.65% fall. The scrip had also underperformed the market in past one quarter, advancing 1.99% as against Sensex's 9.21% rise.

The large-cap company has equity capital of Rs 91.83 crore. Face value per share is Rs 10.

There was an exceptional gain of Rs 204 crore on the sale of Grasim's stake in Alexandria Carbon Black and Thai Carbon Black in Q4 March 2013.

Grasim Industries' consolidated net profit (before exceptional item) declined 17.12% to Rs 2072 crore on 5% growth in revenue to Rs 29324 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).

Despite the prevailing economic slowdown during the year, volumes have been augmented in all the businesses viz. VSF, Chemical and Cement, driven by the commissioning of new capacities, Grasim Industries said. An overcapacity in the VSF business globally and Cement business in India has impacted the realisations and profitability, the company said in a statement.

With regard to its future business outlook, Grasim Industries said that in the VSF sector, margins are likely to remain under pressure in the near term due to overcapacity in China. The slowdown of new capacity additions in China should lead to improvement in industry utilization, the company said. With additional capacity coming on stream, the company is well equipped to further consolidate its leadership position in the industry, it added. In Cement, the demand growth for the industry should gradually recover to 8% on improvement in the economic environment, Grasim Industries said in a statement.

Grasim Industries' board of directors at its meeting held on Friday, 2 May 2014, recommended dividend of Rs 21 per share for FY 2014.

Grasim Industries, a flagship company of the Aditya Birla Group, started as a textile manufacturer in 1948. Today, its core businesses are VSF and cement, contributing over 90% of its revenues and operating profits. It is also present in chemicals which is essentially a backward integration of VSF.

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