Grasim Industries Ltd. of the Aditya Birla Group has reported higher revenue and profit for the fourth quarter ended March 31, 2012. Revenue was higher by 17 per cent at Rs. 25,244 crores against Rs. 21,550 crores in the previous year. PBIDT for the year was at Rs. 6,320 crores (Rs. 5,395 crores), reflecting a growth of 17 per cent. Net profit increased by 16 per cent from Rs. 2,279 crores to Rs. 2,647 crores.
Sales volumes for the quarter at 94,904 tonnes increased by 11 per cent, led by higher exports. This was despite the slowdown in the Eurozone, which impacted textile demand and addition of new capacities in China.
Average realisations for the quarter were lower by 16 per cent on y-o-y basis as prices were at their peak, in line with competing fibres’ prices in the corresponding quarter of last year. Lower realisations, coupled with increase in the prices of caustic soda and coal, resulted in lower profitability. The impact of rising caustic prices was offset by higher profitability of chemical business.
The VSF (120,000 TPA) and chemical (182,500 TPA) greenfield projects at Vilayat in Gujarat and brownfield expansion (36,500 TPA) of VSF at Harihar, Karnataka, are progressing as scheduled. The Vilayat project is slated for commissioning towards the end of the current financial year, while the Harihar project is expected to be commissioned in two phases during the current year.
In VSF, stability in the Eurozone and macro-economic policies will influence demand. In cement, despite 8 per cent projected growth in demand, the surplus scenario is likely to continue for three years. In the present context, rising energy costs pose a challenge to both the businesses.
Capacity expansions under implementation in both VSF and cement will provide additional volumes leading to rapid growth and further consolidation of market leadership.