Facebook Pixel Code

Grasim net drops 4% to R718 crore

Grasim Industries has posted a decline of 4% in the group’s consolidated net profit to R718 crore for the first quarter ended June 30 against R752 crore in the corresponding quarter last year due to higher taxes and increase in minority interest on higher cement profits.

Grasim Industries has posted a decline of 4% in the group’s consolidated net profit to R718 crore for the first quarter ended June 30 against R752 crore in the corresponding quarter last year due to higher taxes and increase in minority interest on higher cement profits.

The tax during the quarter stood at R386 crore, while minority interest was R301 crore. A higher proportion of the company’s profit comes from companies in which it doesn’t hold a controlling stake. Accounting standards don’t allow these to be included in the net profit figure, agencies reported on Friday. However, on the back of enhanced performance in its cement business, the group’s total income surged by 16% to R6,968 crore against R6,032 in the year ago quarter.

Grasim said the weak global economic environment continues to impact the textile industry, while a sliding rupee led to higher input costs. Sales volumes in viscose staple fibre (VSF) business rose significantly by 40% at 77,013 tonnes, driven by operations at the company?s Nagda plant during the quarter. Average realisations were lower by 16% from last year despite a cheaper rupee, as prices were at their peak in the corresponding quarter last year. The decline in realisations and increase in caustic soda and coal prices impacted profitability, said the statement.

In cement business, UltraTech reported improved performance for the quarter as cement sales volume for the quarter were 5% higher at 10.83 million tonnes. Chemical business saw caustic sales volumes increase by 28% to 69,466 tonnes as plant operations remained uninterrupted. Caustic prices remained firm in line with international prices, said the statement.

Going forward, the company said expansions in its viscose staple fibre and chemical business are on track. The expansion in Harihar, Karnataka, will go on stream in two phases in the second quarter and the fourth quarter during the current year. Projects at Vilayat, Gujarat are slated for commissioning towards the end of the current fiscal. In cement business, UltraTech?s cement capacity will be enhanced by 10.2 million tonnes per annum to total 62 million tonnes per annum as expansions in Chhattisgarh and Karnataka are expected to be operational by first quarter of next fiscal.

In VSF, demand will be influenced by stability in the euro zone and macro-economic policies. ?The cotton crop in the ensuing season will influence realisations in the short term. In cement, despite the 8% projected growth in demand, the surplus scenario is likely to continue for three years,? said the statement.

Grasim Industries share price closed 2.06% up at R2,700.40 on Friday at the BSE.

Get live Share Market updates, Stock Market Quotes, and the latest India News and business news on Financial Express. Download the Financial Express App for the latest finance news.

First published on: 28-07-2012 at 03:17 IST
Market Data
Market Data
Today’s Most Popular Stories ×