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Grasim Industries, a subsidiary of the Aditya Birla Group which is into producing viscose staple fibre and cement has posted a 15% fall in its net profit as the VSF business suffered due to over capacity by China and slowdown in construction activity affected the cement business.
Net profit in the first quarter of the current fiscal stood at Rs 610 crore while net sales came in at Rs 940 crore, a weak rise of 1.5%.
'The performance has been satisfactory considering the prolonged subdued economic environment in India and across the world,' Grasim Industries said in a press release.
Due to the completion of expansion at Harihar plant, VSF production has improved by 2% in the June quarter compared to the March quarter of the previous fiscal.
Sales volume was 77,518 tonnes and net revenue stood at Rs980 crore. VSF prices remained under pressure due to overcapacity in China. The impact of the decline in prices was partly neutralized by depreciation of the Indian rupee. On the cost front, the price of caustic and sulphur has eased. However, lower realisations caused profits to decline.
Ultra Tech, the cement subsidiary of Grasim Industries volume was 10.88 million tonnes while net revenue stood at 5,294 crore.
With the commissioning of the caustic soda plant at Vilayat (Gujarat) in May 2013, chemical sales volume increased by 9% to 72,028 tonne. “Volumes will further improve with the gradual ramp up of capacity. ECU realisations saw a correction from the peak level witnessed during FY 2013,” the company said in a press release.
