The Hindu Business Line : Grasim: Non-cement businesses drive growth

The company registered a 35 per cent growth in net profits at Rs 553.79 crore for the quarter ending December 2007, on the back of a 15.5 per cent increase in sales. Profit margins grew by 3.89 per cent year-on-year and 0.95 per cent quarter-on-quarter.

Consolidated profits of the company also rose 29 per cent to Rs 722 crore with total income soaring to Rs 4,448 crore against Rs 3,732 crore a year ago.

Growth in net profit was driven mainly by contributions from caustic soda and sponge iron divisions of the company.

Cement Business

A strong demand environment helped caustic soda production grow by a strong 68 per cent, while sponge iron production increased by 22 per cent for the quarter.

Cement production was more or less flat, registering a 1 per cent from 3.67 million tonnes to 3.69 mt.

Margins from the cement business were flat, as a rise in fuel prices offset improved realisations.

Better performance from the sponge iron and caustic soda divisions may help compensate for any margin pressures in the cement business (given the uncertain demand-supply outlook, especially in the Northern market) post September 2008.

The stock of Grasim Industries rose 6 per cent to close at Rs 3,034 on Wednesday amidst significant volatility.

From levels of Rs 3,765 on January 1, the stock has declined to the current Rs 3,000 levels.

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