Aditya Birla Group firm Grasim Industries Ltd on Monday reported a 9.39 per cent decline in consolidated net profit at Rs 1,039.91 crore for the third quarter ended December.
The company had posted a net profit of Rs 1,147.80 crore during the October-December quarter of the previous fiscal, Grasim Industries said in a regulatory filing.
Total income during the quarter under review fell 1.17 per cent to Rs 19,447.57 crore as against Rs 19,678.76 crore in the corresponding period of the previous fiscal.
Total expenses rose marginally to Rs 18,032.24 crore as compared with Rs 18,006.59 crore in the year-ago quarter.
Grasim's revenue from viscose - pulp, viscose staple fibre and filament yarn segment declined 16.09 per cent to Rs 2,194.13 crore as against Rs 2,615.12 crore a year ago.
"This quarter's profitability was impacted primarily by the drop in the domestic VSF (viscose staple fibre) prices, on the back of weakening global prices owing to large supply surplus triggered by new capacity additions in Asia in last one year and global demand slowdown caused by US-China trade war," the company said in a post earning statement.
It further added, "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's revenue from cement business during the quarter was 0.86 per cent lower at Rs 10,353.80 crore as against Rs 10,444.08 crore in the corresponding quarter of previous fiscal.
"UltraTech reported consolidated revenue of Rs 10,354 crore and EBITDA of Rs 2,141 crore in Q3FY20, up 25 per cent YoY. PAT stood higher at Rs 712 core, up 80 per cent YoY. The consolidated sales volume stood at 20.90 MTPA," it said.
During the quarter, UltraTech divested its entire shareholding in Emirates Cement Bangladesh Ltd and Emirates Power company Ltd to Heidelberg Cement Bangladesh at enterprise value of BDT equivalent of USD 30.2 million, it added.
Grasim's revenue from chemicals segment fell 12.58 per cent to Rs 1,362.38 crore as against Rs 1,558.54 crore in the third quarter of 2018-19.
"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," the company said.
Caustic soda sales and production volume for Q3FY20 stood at 257 KT and 261 KT, respectively.
Revenue from financial services segment rose 15.18 per cent to Rs 4,309.29 crore as against Rs 3,741.10 crore a year ago.
Revenue from others segment was at Rs 1,200.89 crore during October-December quarter, down 13.38 per cent from Rs 1,386.50 crore in the year-ago period.
On the outlook, the company said, "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."
The company's chemical business is under 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, it said.
"In cement, signs of revival were visible in some markets during the latter part of Q3FY20. This, together with the government's firm commitment to revive the economy and the thrust on infrastructure spending, augur well for the growth of cement demand," it said, adding that the company with its presence across the country is best positioned to take advantage of the revival in cement demand.
Shares of Grasim Industries Ltd on Monday closed 3.60 per cent lower at Rs 758.95 on the BSE.