Grasim net up 80% to Rs 338 cr

BS 200 Scorecard

Grasim Industries, the Aditya Birla group flagship, has posted 80 per cent growth in net profit after registering 23 per cent rise in net sales.

The company's net sales went up from Rs 1,639.1 crore in the quarter ended September 30 to Rs 2,010.82 crore in the same period last year. Net profit, during the period, rose to Rs 337.84 crore from Rs 187.65 crore last year.

Higher realisations coupled with saving in operating costs due to upgrade of plants and energy optimisation helped the Birla company to achieve the improved results.

The consolidated numbers showed the company's net sales went up 35.9 per cent to Rs 3,183.81 crore from Rs 2,343.50 crore in the corresponding period last year. Net profit for the quarter grew by 108.7 per cent to Rs 418.3 crore against Rs 200.4 crore in the corresponding quarter last year. The EPS for the period increased to Rs 45.6 against Rs 21.9.

"It is the peak performance of the company so far. Both the major part of our business, cement and viscos stable fibre (VSF) have performed equally well this quarter," said D D Rathi, wholetime director and CFO of the company.

On the back of strong demand from domestic as well as international markets, all fibre plants of the company were on full capacity.

In case of cement segment, the capacity utilisation was at 101 per cent against 98 per cent. Cement saw an increase of 4 per cent in sales volumes.

Realisation grew by 42 per cent at Rs 2,822 per tonne against Rs 1,993 in the corresponding quarter last year. On the back of strong realisation, revenue grew by 42 per cent. Prices remaining stable even during the monsoon helped the company reaching better realisation. This quarter the company increased its despatches through rail routes to 49 per cent from 34 per cent.

Grasim has announced a capacity expansion plan of Rs 4,582 crore in the next two years. Out of this, Rs 2,590 crore will be used to increase its cement capacity by 9.5 million tonne by June 2009. About Rs 408 crore will go to VSF segment in a phased manner by December 2007.

Cement contributed 68 per cent to the revenue, whereas VSF contributed 23 per cent. "We are looking at expanding our market share in cement and this sector will continue to make major portion of the revenue. Simultaneously, VSF will also see good growth," Rathi added.

The chemical and sponge iron businesses of the company suffered setbacks.

There was shutdown in the captive power plant which led to lower production and lower sales volumes in chemical business. In sponge iron segment, due to inadequate availability of natural gas, the capacity utilisation was lower.