The Hindu Business Line : Grasim net profit up 64%

Mumbai, July 28 Aditya Birla flagship company, Grasim Industries, has reported a 64 per cent rise in net profit to Rs 511.63 crore in the quarter ended June 30, 2007, against Rs 311.9 crore during the corresponding quarter last year.

Net sales jumped 29.23 per cent to Rs 2,444 crore in the quarter under review against Rs 1,891 crore during the same period last year. Total expenditure rose to Rs 1,652 crore (Rs 1,378 crore) mainly due to higher freight, power and raw material cost.

On a consolidated basis, Grasim’s net profit in the quarter was up 54 per cent at Rs 670 crore, against Rs 435 crore in the comparative quarter last year. Net sales rose 26 per cent to Rs 4,063 crore (Rs 3,213 crore).

The board has approved the sale of its textile units at Bhiwani in Haryana to a proposed subsidiary company. “The move will enable the new entity to have a more focussed approach to the development of textile business. This will also help Grasim to focus more on its two key businesses – viscose staple fibre and cement,” the company said in a statement.

Cement business clocked higher revenue at Rs 2,827.66 crore in the first quarter against Rs 2,341.20 crore in the same quarter last year.

Cement business

Sales volume increased 12 per cent to 3.9 million tonnes. Capacity utilisation was up at 118 per cent against 109 per cent. RMC (ready mix cement) volumes were up 19 per cent. The cement segment business registered a 9 per cent growth.

Capital outlay

The company envisages a capital outlay of Rs 4,085 crore (net of capex spent in FY ’07) for the next two years.

On completion, Grasim’s cement capacity, including that of its subsidiary will go up by 17 mt to 48 mt, an increase of 54 per cent of the current capacity.

“Over the next 3 years, with large capacities announced by the industry, there could be a surplus scenario, which in turn could affect realisations by mid-FY ’09. However, given a strong growth in demand, the outlook for cement business continues to be positive,” it said.

Viscose staple fibre production was up 52 per cent at 68.755 tonnes during the first quarter. Capacity utilisation was higher at 102 per cent against 70 per cent in the same quarter last year. Sales volume rose 34 per cent to 69.396 tonnes.

“Firm international prices backed by a strong global demand saw rise in realisations. The increased dependence on captive pulp help contain the impact of rising global pulp prices,” the company said.The company’s expansion plans at Kharach in Gujarat is expected to go on stream by end FY ’08. Grasim is also increasing its VSF capacity at its Harihar unit in Karnataka by 31,000 tonnes per annum.

More Stories on : Financial Performance | Cement | Grasim Industries Ltd | Textiles

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