Grasim net jumps 154% on higher sales volume

BS 200 SCORECARD

Grasim Industries' net profit jumped 154 per cent to Rs 411.58 crore in the quarter ended December 31, 2006, compared with Rs 161.87 crore in the previous corresponding quarter. Its net sales grew 38.3 per cent to Rs 2,279.39 crore during the period from Rs 1,648.2 crore last year.

The Aditya Birla group flagship company's operating profit for the quarter surged 112.51 per cent to Rs 710.45 crore from Rs 334.32 crore a year ago. EPS (earnings per share) jumped 154.33 per cent to Rs 44.89 against Rs 17.65 per share.

Its consolidated net profit for the quarter zoomed 184 per cent to Rs 555 crore, against Rs 195 crore in the corresponding quarter a year earlier. The consolidated net sales grew 46 per cent to Rs 3,688 crore from Rs 2,520 crore. 
 

Rs crore	Quarter ended Dec
	2005	2006
Net sales	1648.20	2279.39
Other income	15.24	44.39
Total income	1663.44	2323.78
Expenditure	1329.12	1613.33
Operating profit	334.32	710.45
Gross profit	310.83	686.44
PBT	237.57	605.75
Net profit	161.87	411.58
Net profit to  net revenue (%)	9.82	18.06

The company's VSF (viscose staple fibre) business saw a capacity utilisation of 103 per cent during the last quarter compared with 96 per cent in the corresponding last quarter. Sales volumes were up 2 per cent at 67,061 tonne, the highest ever recorded in any quarter. The realisation rose 24 per cent to Rs 90,389 a tonne from Rs 72,816 a tonne.

The company's VSF capacities at Nagda, Harihar and Kharach will be augmented by 49,275 tonne to 315,725 tonne a year by the next financial year. It has earmarked a sum of Rs 722 crore for expansion and modernisation of the plants.

Strong growth in demand and realisations boosted the company's cement business as well. The quarter saw revenues increase 55 per cent. Realisation in cement grew 49 per cent to Rs 2,918 a tonne from Rs 1,959 a tonne.

Higher despatches through rail, which grew to 46 per cent from 37 per cent, also helped partially mitigate the escalating freight costs.

The company is setting up two cement plants in Rajasthan, with a capacity of 4 million tonne each. The project will attract an investment of Rs 2,495 crore.

Production was higher by 29 per cent in the sponge iron business, at 1,16,996 tonne. Sales volumes surged 50 per cent to 1,47,339 tonne. However, inadequate supply of natural gas continued to impact volumes.

The chemical division was hit as the captive power plant remained shut during the quarter, impacting production resulting in lowering down of sales volumes by 34 per cent. However, realisations improved 12 per cent. The company expects the volumes to improve once normalcy in the plant is restored.