Grasim Industries gains after good Q4 results

Grasim Industries rose 1% to Rs 4,141.10 at 10:16 IST on BSE after consolidated net profit rose 37.38% to Rs 696.09 crore on 13.69% rise in net sales to Rs 9896.43 crore in Q4 March 2016 over Q4 March 2015.

The result was announced on Saturday, 7 May 2016.

Meanwhile, the BSE Sensex was up 315.63 points, or 1.25%, to 25,544.13 .

On BSE, so far 3,798 shares were traded in the counter, compared with an average volume of 9,017 shares in the past one quarter. The stock hit a high of Rs 4,165.80 and a low of Rs 4,117.40 so far during the day. The stock hit a 52-week high of Rs 4,176 on 3 May 2016. The stock hit a 52-week low of Rs 3,242.05 on 26 February 2016. The stock had outperformed the market over the past one month till 6 May 2016, 4.84% compared with 1.32% rise in the Sensex. The scrip had also outperformed the market in past one quarter, 18.52% as against Sensex's 2.48% rise.

The large-cap company has an equity capital of Rs 93.35 crore. Face value per share is Rs 10.

Grasim Industries' consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) rose 24.19% to Rs 2059 crore in Q4 March 2016 over Q4 March 2015.

The company's consolidated net profit rose 35.29% to Rs 2359.15 crore on 11.68% rise in net sales to Rs 36217.70 crore in the year ended March 2016 over the year ended March 2015.

Consolidated EBITDA rose 23.61% to Rs 7025 crore in the year ended March 2016 over the year ended March 2015.

During the year, under a court approved scheme of amalgamation, Aditya Birla Chemicals (India) (ABCIL) was amalgamated with the company with effect from the appointed date of 1 April 2015. In terms of the scheme. The company issued 14.62 lakh equity shares to the shareholders of the erstwhile ABCIL in the ratio of one share of Rs 10 each fully paid up against sixteen shares of Rs 10 each fully paid up of ABCIL held by them, thereby increasing equity share capital of the company by Rs 1.46 crore. In view of amalgamation of ABCIL with the company, the results for the quarter and current year ended 31 March 2016 are not strictly comparable with corresponding period(s) of the previous year.

Grasim Industries said it has announced impressive results led by robust volume growth in all its businesses viz. Viscose Staple Fibre (VSF), Chemical and Cement.

Globally, VSF prices witnessed a recovery post the Chinese New Year on the back of better demand. The VSF business revenue increased by 23% at Rs 1,729 Cr. Sales volume grew by 10% at 130,000 tonnes per annum helped by additional volume from Vilayat plant and concerted efforts towards market expansion.

The chemical business revenue surged 123.08% to Rs 957 crore in Q4 March 2016 over Q4 March 2015.

The cement sector displayed signs of recovery with demand growth for the industry estimated at approximately 11.5% for the current quarter. UltraTech outpaced the industry with domestic volume growth of 15%. Revenue for the quarter rose 4.93% to Rs 6920 crore in Q4 March 2016 over Q4 March 2015. EBITDA was up by 3% at Rs 1,478 crore in Q4 March 2016 over Q4 March 2015, helped by enhanced volumes and lower fuel prices. Net profit rose 10.05% to Rs 723 crore in Q4 March 2016 over Q4 March 2015.

The company stated in its outlook that in VSF, the capacity additions have slowed down globally. Further, cotton production is projected to be lower than the consumption in Season 2015-2016 with the reduced acreage and unfavorable climate. As a result, the price volatility of VSF is expected to reduce. The company will continue to focus on expanding VSF market in India by partnering with the textile value chain and better customer connect through its Liva brand. Enhancing product mix through larger share of specialty fibre will be yet another focus area.

Meanwhile, the caustic demand in India is expected to grow with increased demand from the end user industry. To meet the growing demand, caustic capacity is being raised by 100,000 tonnes per annum through debottlenecking at different units, the company added.

Further, in cement, demand is expected to grow at 7% - 8% for the current financial year ending March 2017, driven by the government's focus on infrastructure development, housing, smart cities etc. The company is well positioned across the country to cater the growth in demand. Grasim is well poised to reap the benefits of the investment in capacity expansion and acquisitions with the expected upturn in the economy, the company said.

Powered by Capital Market - Live News