You are here: Home » News-CM » Equities » Hot Pursuit
Business Standard

Grasim Inds slides after Q3 PAT declines 28%

Capital Market 

Grasim Industries tumbled 2.83% to Rs 765 after the company announced weak Q3 December 2019 numbers during market hours today, 10 February 2020.

On a consolidated basis, Grasim's net profit declined 28.25% to Rs 680.27 crore in Q3 December 2019 as against net profit of Rs 948.11 crore in Q3 December 2018. Total revenue declined 1.37% year-on-year (YoY) to Rs 19205.05 crore in Q3 December 2019 over Q3 December 2018.

Profit before tax (PBT) for Q3 December 2019 stood at Rs 1454 crore, down by 16.82% from Rs 1748 crore in Q3 December 2018.

EBITDA declined 4.78% to Rs 2968 crore in Q3 December 2019 as against Rs 3117 crore reported in Q3 December 2018.

In company's Viscose (VSF) Business, production and sales volume recorded an increase of 5% and 3% YoY to 148KT and 138KT respectively. VSF's profitability was impacted primarily by the drop in the domestic VSF prices. The reduction in the domestic VSF prices was accelerated to counter surge in cheap yarn imports from China/Indonesia which impacted viability of Indian spinners. The company said domestic VSF prices may witness some improvement in the near term with improving sentiments post phase-1 of US-China trade deal and near-term global supply constraints from China.

The company's chemical business reported a net revenue of Rs 1362 crore for Q3FY20 while EBITDA stood at Rs 185 crore. The company reported that global caustic soda prices were soft during the quarter. Domestic caustic prices were impacted due to increased domestic capacity, rise in imports and weak demand.

Grasim in an exchange filing said the total capex plan of about Rs 7,800 crore (at standalone level) is under execution for raising capacities in both the VSF and Chemical businesses. This capital expenditure is expected to be incurred over three year's period from FY20-FY22.

The company assured that the VSF business will continue to focus on expanding the market in India by partnering with the textile value chain, achieving better customer connect through its brand LIVA and extension into new categories. Furthermore, the Chemical business is under an expansion mode for both chlor-alkali and specialty chemicals. The ongoing expansion projects at different sites and new product lines for specialty chemicals will enable growth of the business. Grasim is incurring capex to increase capacities across its key businesses and is potentially well positioned to leverage the next phase of the economic growth.

Grasim Industries is a leading manufacturer in cement, viscose staple fibre and chemicals.

Powered by Capital Market - Live News

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, February 10 2020. 14:22 IST