Grasim Industries' consolidated net profit for the quarter ended June 30 dipped 4.5 per cent to Rs 718 crore due to higher tax outgo.
"Due to higher taxes and increase in minority interest on higher cement profits, the net profit for the quarter was Rs 718 crore against Rs 752 crore in the corresponding quarter," Grasim said in a statement today.
Tax expenses rose to Rs 385.55 crore during the quarter from Rs 372.55 crore a year ago. At the same time, minority interest on higher profits from the cement business also went up by Rs 38 crore to Rs 301 crore.
Grasim's scrip today settled at Rs 2,700.40 per share at the BSE, up 2.06 per cent over the previous closing.
The revenue of the company, which mainly produces viscose staple fibre (VSF) used in the textile industry and cement, however, rose by 16 per cent from Rs 5,907 crore to Rs 6,832 crore.
Grasim said though VSF sales volumes rose by 40 per cent at 77,013 tonnes over a year ago, average realisations were lower by 16 per cent. VSF contributed Rs 1,203 crore to the company's top-line during the reporting quarter.
"The decline in realisations coupled with the increase in caustic soda and coal prices impacted profitability (in the VSF business)," it said.
Cement business, which Grasim runs through a subsidiary, Ultratech, reported a 17 per cent rise in revenue to Rs 5,363 crore during the quarter on higher sales volume.
Ultratech's net profit rose 14 per cent to Rs 764 crore, though variable costs went up by 10 per cent mainly due to higher outgo on energy and raw material and increased railway freights.
"Although imported coal prices softened by around 19 per cent, the depreciation in rupee by 21 per cent offset the benefit," the company said.
Meanwhile, Competition Commission of India has imposed a Rs 1,175.49 crore penalty last month on Ultratech for its alleged involvement in forming the cement price cartel.
Going forward, Grasim said stability in the Euro Zone and macro-economic policies would influence VSF demand. However, the surplus scenario in the cement sector may continue for the next three years.
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